U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22833 / October 4, 2013
Securities and Exchange Commission v. China MediaExpress Holdings, Inc. and Zheng Cheng, Civil Action No. 1:13-cv-00927 (D.D.C.)
Court Enters Final Judgment by Default Against SEC Defendant China Mediaexpress Holdings, Inc.
The Securities and Exchange Commission announced that on October 3, 2013, the Honorable Ellen S. Huvelle, United States District Court Judge for the District of Columbia, entered a final judgment by default against Defendant China MediaExpress Holdings, Inc. (China Media). The final judgment permanently enjoins China Media from future violations of various provisions of the federal securities laws, including Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act. The final judgment also holds China Media liable for total combined disgorgement and prejudgment interest of $41,894.082.05 and a civil monetary penalty in the amount of $7,250,000.
On June 20, 2013, the SEC filed a complaint against China Media and its Chairman and CEO, Zheng Cheng (collectively, the "Defendants") alleging that from at least October 2009, the Defendants engaged in a scheme to mislead and defraud investors by, among other things, grossly overstating China Media's cash balances. The complaint alleged that after China Media materially misrepresented its financial condition and business operations, its stock price tripled to more than $20 per share, making the company attractive to the investing public and allowing it to raise more than $53 million from stock sales to investors.
For further information, please see Litigation Release Number 22731(June 20, 2013) [SEC Charges China-Based Company and CEO in Latest Cross Border Working Group Case].