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SEC Accuses Investment Fund of Engaging in Deceptive Practices

Posted on August 29th, 2023 at 4:13 PM
SEC Accuses Investment Fund of Engaging in Deceptive Practices

From the desk of Jim Eccleston at Eccleston Law

The Securities and Exchange Commission (SEC) has brought settled charges against Summitcrest Capital Inc. and its principals, Johnny Tseng and Kevin Zhang, alleging that they engaged in an offering fraud via their real estate investment fund, SC Development Fund LLC.

The fund collected around $19.8 million from approximately 30 investors in the United States and China from February 2018 to November 2019. The fund declared bankruptcy in July 2020 and currently is not operating.

According to DIWire, the SEC complaint claims that Tseng and Zhang, co-owners of Summitcrest, managed SC Development Fund (previously named SC Development Fund V LLC), a real estate investment fund. The fund, as alleged, actively targeted investors within Chinese-speaking communities in both the United States and China for its unregistered offering.

The complaint further provided that SC Development Fund claimed it would utilize investor funds to provide real estate-related loans to the public and utilize the generated income to fulfill pledged interest payments and return capital to investors. However, according to the SEC, SC Development Fund instead exclusively directed investor funds toward loans for Zhang's own real estate development.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law

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