U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20593 / May 22, 2008
Securities and Exchange Commission v. Hyun Soo Jang, Kangsan Kim, Unus Capital Management, Inc. and Peoplen Investment, Corp., Case No. CV 06-06775 CAS (AJWx) (C.D. Cal.).
Permanent Injunction, Order of Disgorgement and Penalty Entered
The United States Securities and Exchange Commission announced that on May 13, 2008, the Honorable Christina A. Snyder, United States District Judge for the Central District of California, entered a final judgment by default against defendants Hyun Soo Jang ("Jang"), Kangsan Kim ("Kim"), Unus Capital Management, Inc. ("Unus), and PeopleN Investment Corp. ("PeopleN"), in connection with an investment scheme perpetrated by Jang and Kim that raised more than $4 million from members of Southern California's Korean language-speaking community. Judge Snyder ordered that each of the defendants be enjoined from future violations of the federal securities laws, including the anti-fraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Judge Snyder further held defendants Jang and PeopleN jointly and severally liable to pay disgorgement of $3,358,274.18, plus prejudgment interest of $267,701.38, ordered Unus to pay disgorgement of $326,000, plus prejudgment interest of $25,986.76, and assessed a $130,000 civil penalty against Jang. The Commission did not request, and Judge Snyder did not order, disgorgement and penalties from Kim, because Kim previously had been ordered to pay restitution in an amount exceeding the Commission's disgorgement claim and is currently serving a lengthy prison sentence in connection with his guilty plea in the parallel criminal matter.
The Commission's complaint, filed on October 24, 2006, alleged that Jang and Kim portrayed their now-defunct firms, PeopleN and Unus, as legitimate, regulated companies. The complaint alleged that Jang and Kim represented to potential investors that they were experienced investment advisers, and that Kim's registered investment advisory firm, Unus, would select stocks, bonds and mutual funds that would be purchased and sold for client accounts by Jang's purported broker-dealer, PeopleN, which was falsely held out as a licensed Broker/Dealer and member of the NYSE, NASDAQ, and SIPC. The complaint alleged that Jang and Kim did not use investor funds to purchase securities as promised. Instead, according to the complaint, Jang and Kim misappropriated the funds entrusted to them, including about $2.5 million taken by Jang, and $500,000 taken by Kim and Unus. The complaint also alleged that Jang used an additional $500,000 to repay existing investors with money that had been deposited by new investors.
For additional information, see Litigation Release No. 19880 (October 25, 2006).