U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19769 / July 21, 2006
C+ Capital Management, LLC & Won Charlie Yi, Civil Action No. CV 04-3670 GAF (VBKx) (C.D.Cal.)
Permanent Injunction, Orders of Disgorgement and Penalty Entered Against Won Charlie Yi
The United States Securities and Exchange Commission announced that on July 7, 2006, the Honorable Gary A. Feess, United States District Judge for the Central District of California, entered a final judgment by default against Won Charlie Yi, in connection with an affinity fraud perpetrated by Yi through C+ Capital Management, LLC, formerly an investment advisory firm registered with the State of California and based in Los Angeles. Judge Feess ordered that Yi be enjoined from committing securities fraud in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and from aiding and abetting violations of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. C+ Capital previously was enjoined from violating the above antifraud provisions in a default judgment issued by the Court on February 28, 2005. Judge Feess further ordered that Yi was individually liable for disgorgement of $13,384,065.10, and both Yi and C+ Capital were jointly and severally liable for disgorgement of an additional $15,710,490.70, plus prejudgment interest. Yi also was ordered to pay a civil penalty of $120,000.
The Commission's complaint, filed on May 25, 2004, alleged that Yi and C+ Capital raised at least $36 million since May 2002 by soliciting members of the Korean-language speaking community in Southern California. Yi represented that C+ Capital would establish brokerage accounts in the clients' names at Carlin Equities Corp., a registered broker-dealer, and promised to use his expertise to buy and sell stocks in the clients' accounts. However, Yi did not open brokerage accounts for advisory clients, but instead deposited the clients' checks into a bank account held in his name. Yi subsequently provided C+ Capital's clients fabricated with account statements, purporting to reflect their portfolio positions in accounts at Carlin. Yi attempted to forestall discovery of the fraud by offering various excuses to clients to prevent them from liquidating their holdings.