Wensheng Lin


Litigation Release No. 23831 / May 11, 2017

Securities and Exchange Commission v. Wensheng Lin and Sheng Li Chen, No. 17 Civ. 3054 (VEC) (S.D.N.Y. filed April 26, 2017)

Court Orders Continuing Asset Freeze of $1.2 Million In Assets From Two Chinese Citizens For Illegally Selling Penny Stock Shares

The Securities and Exchange Commission has obtained a continuing asset freeze against Wensheng Lin and Sheng Li Chen, two Chinese citizens charged with illegally selling more than 2.3 million penny stock shares for net profits of over $1.8 million.

The order freezing assets, entered by the court on May 10, 2017, freezes Lin and Chen’s assets in their brokerage accounts, including approximately $1.2 million that otherwise would have been wired to bank accounts in Hong Kong, and millions of shares of stock. The order provides that the assets are frozen pending the final determination of the case and continues the previously ordered temporary asset freeze.

According to the SEC’s complaint filed in U.S. District Court for the Southern District of New York on April 26, 2017, Lin and Chen acquired over 8.4 million shares of Immage Biotherapeutics Corp. (IMMG) at $0.0037 per share, or just over $31,000. Lin and Chen allegedly sold their shares for as much as $1.4745 and $1.1286 per share, collectively earning net profits of more than $1.8 million. According to the SEC, Lin and Chen violated Section 5(a) and (c) of the Securities Act of 1933 as no registration statement was filed or in effect covering Lin’s or Chen’s sales, and no exemption from registration was available.

The SEC suspended trading in IMMG on April 4.

The SEC’s continuing investigation is being conducted by Jennifer K. Vakiener, Hane L. Kim, Steven G. Rawlings and Joseph Darragh of the Microcap Fraud Task Force in the New York Regional Office. The case is being supervised by Lara S. Mehraban, and the litigation is being handled by Kevin P. McGrath, Ms. Vakiener and Ms. Kim. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.