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U.S. Securities and Exchange Commission


Litigation Release No. 18729 / May 28, 2004

SEC v. C+ Capital Management, LLC & Won Charlie Yi, (U.S. District Court for the Central District of California, Civil Action No. CV 04-3670 GAF (VBKx)


The United States Securities and Exchange Commission filed an emergency action on May 25, 2004 to halt an affinity fraud scheme perpetrated by Won Charlie Yi and his investment advisory firm, C+ Capital Management, LLC. The scheme targeted primarily members of the Korean community in Los Angeles. The Honorable Gary A. Feess, United States District Judge for the Central District of California, granted the Commission's request for a temporary restraining order as well as orders freezing the assets of Yi and C+ Capital.

Also on May 25, 2004, the Federal Bureau of Investigation executed a search warrant at C+ Capital's offices located in Los Angeles. Simultaneously, the California Department of Corporations initiated an administrative action to revoke C+ Capital's investment adviser's certificate.

The defendants named in the Commission's complaint are:

  • Won Charlie Yi (also known as Won Charles Yi, W. Charlie Yi, W. Charles Yi, Won Chong Yi, and Charlie Yi), age 34, of Pacific Palisades, California, is the managing member and principal owner of C+ Capital.
  • C+ Capital Management, LLC. is a Delaware limited liability company registered as an investment adviser with the State of California. C+ Capital is headquartered in Los Angeles, California and operates an office in Seoul, South Korea

In its lawsuit and request for emergency relief, the Commission alleges that Yi raised at least $36 million by soliciting members of the Korean community to invest funds through C+ Capital. According to the complaint, Yi misrepresented to investors that C+ Capital would establish brokerage accounts at Carlin Equities Corp., a registered broker-dealer, in which Yi would buy and sell stocks on behalf of the investors at discounted prices. He then instructed his clients to make checks payable to "Carlin Corp." The Commission further alleges that Yi not only failed to open brokerage accounts for his advisory clients, but he also deposited the checks into a bank account held in his own name. Yi then provided the clients with fabricated Carlin account statements, and lulled investors when they later sought to withdraw funds from their accounts by giving them various reasons why their holdings could not or should not be immediately liquidated.

The Commission's complaint alleges that Yi and C+ Capital violated the antifraud provisions of the federal securities laws, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and as to C+ Capital, Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, while Yi aided and abetted C+ Capital's violations of these provisions. In addition to the emergency relief described below, the Commission seeks, from each defendant, permanent injunctions, disgorgement with prejudgment interest, and a civil penalty.

In its emergency relief, the Commission obtained an order (1) temporarily enjoining both defendants from future violations of the antifraud provisions, (2) freezing the assets of Yi and C+ Capital; (3) preventing destruction of documents; (4) requiring accountings from the defendants; and (5) authorizing expedited discovery. A hearing on whether a preliminary injunction should be issued against the defendants is scheduled for June 8, 2004, at 4:30 p.m.

The Commission wishes to acknowledge the assistance of the Federal Bureau of Investigation, the United States Attorney's Office for the Central District of California, and the California Department of Corporations.


Modified: 05/28/2004