Securities and Exchange Commission
Litigation Release No. 17899 / December 17, 2002
Brooklyn Jury Convicts Securities Law Recidivist
United States v. Jui-Teng Lin, CR-02-0432 (DGT) (Eastern District of New York filed April 11, 2002)
On December 13, 2002, a federal jury in the United States District Court for the Eastern District of New York found Dr. Jui-Teng Lin guilty on charges of securities fraud and money laundering. According to the evidence at trial, Dr. Lin reaped approximately $1,500,000 in ill-gotten gains from manipulating the common stock of Surgilight, Inc., a publicly traded company headquartered in Orlando, Florida. Dr. Lin artificially inflated the market price of Surgilight stock tenfold (from approximately $2.50 to over $25 per share) through a series of false and misleading press releases detailing the company's purported ability to cure age-induced vision deterioration known as "Presbyopia." Dr. Lin simultaneously dumped a substantial amount of Surgilight stock on an unsuspecting public through two nominee accounts and then wired the proceeds overseas.
At the time of his indictment, the Securities and Exchange Commission ("Commission") filed a civil action against Dr. Lin and others in the United States District Court for the Middle District of Florida. The Commission's complaint alleges that Dr. Lin violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 ("Securities Act"), Sections 10(b), 13(d), and 16(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 13d-1, 13d-2, 16a-2, and 16a-3 thereunder. Dr. Lin's wife and Surgilight are charged with violations of Sections 5(a), 5(c), and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Aaron Tsai is charged with violations of Sections 5(a) and 5(c) of the Securities Act and aiding and abetting Dr. Lin and Ms. Lin's violations of Section 10(b) of the Exchange Act and Rules 10b-5 thereunder. The Commission seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties from all defendants and an officer and director bar against Dr. Lin.
The Lins settled a prior civil action brought by the Commission involving another laser eye surgery company in September 1998 [see SEC v. Jui-Teng Lin and Yuchin Lin, Litigation Release No. 15870 (Sept. 3, 1998)]. In that civil action, the Lins consented, without admitting or denying the allegations of the complaint, to the entry of a final judgment enjoining them from future violations of section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, as well as various other provisions of the securities laws. For further information, see Litigation Release No. 17469 (April 11, 2002).
For tips on how to avoid Internet "pump-and-dump" stock manipulation schemes, visit http://www.sec.gov/investor/online/pump.htm. For more information about Internet fraud, visit http://www.sec.gov/divisions/enforce/internetenforce.htm. To report suspicious activity involving possible Internet fraud, visit http://www.sec.gov/complaint.shtml.