U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20772 / October 6, 2008

SECURITIES AND EXCHANGE COMMISSION v. NEXT COMPONENTS, LTD. and NORMAN HSU, Civil Action No. SACV 08-1112 DOC (ANx) (C.D. Cal.)

SEC ALLEGES NORMAN HSU AND NEXT COMPONENTS DEFRAUDED INVESTORS IN MULTI-MILLION DOLLAR PONZI SCHEME

The Securities and Exchange Commission announced that today it filed a Complaint in the United States District Court for the Central District of California against Next Components, Ltd. and its principal, Norman Hsu alleging that the defendants violated Sections 5 and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Norman Hsu, a former resident of California and New York, is in federal custody awaiting trial on federal criminal charges of investment fraud and wire fraud in connection with his operation of the alleged nationwide Ponzi scheme.

According to the SEC’s complaint, filed in the federal district court for the Central District of California, Hsu presented himself as an international businessman with high-level contacts with overseas businesses, particularly in the Chinese apparel and technology industries. The SEC’s complaint alleges that from January 2003 through September 2007, Hsu told investors that Next Components would pool their funds to finance bridge loans negotiated by Hsu that would generate investor returns of 14 to 24 percent every 70 to 130 days.

The SEC alleges that Hsu and Next Components instead used new investor funds to pay “returns” to pre-existing investors, and misappropriated the remainder of investor funds to pay sales agent commissions, finance Hsu’s luxury living and entertainment expenses, and reimburse investors for political donations solicited by Hsu.

The complaint alleges that Next Components and Hsu violated the antifraud and registration provisions of the federal securities laws. The Commission seeks permanent injunctions, disgorgement, prejudgment interest, and civil penalties against the defendants.

The Commission acknowledges the assistance of the U.S. Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation.

SEC Complaint in this matter

 

http://www.sec.gov/litigation/litreleases/2008/lr20772.htm


Modified: 10/06/2008