Remember that awesome Wall Street Journal story a couple of weeks ago on the shady financier Danny Pang? It took less than two weeks for the SEC to charge him with fraud and freeze his assets—or what’s left of them, anyway.
The Journal did all the SEC’s work for it—the agency’s complaint reads like a crib sheet of the paper’s original story:
The SEC also accused Mr. Pang of lying about his past, saying PEMGroup falsely represented him as a former merger adviser at Morgan Stanley and said he held an M.B.A. degree from University of California, Irvine. Mr. Pang never worked at Morgan Stanley, nor did he attend or obtain any degrees from UC Irvine, the SEC said.
The SEC alleged Mr. Pang’s fraud began at least in 2003 when he raised hundreds of millions of dollars from investors, mostly in Taiwan. Mr. Pang sold investors securities and told them he would earn enough profit to pay them returns through purchasing life-insurance policies at a discount, the SEC said. In truth, the SEC alleged, the life-insurance policies didn’t generate enough profit to cover the cost of the premiums or meet the returns he promised to investors. PEMGroup instead paid investors from new money that was supposed to be invested in time-shares, the SEC said.
In one instance, PEMGroup presented investors with a forged $108 million insurance policy to support its claim that one investment was entirely covered by insurance, the SEC said. The SEC alleged the insurance policy was for approximately $31 million.
We said Journal reporter Mark Maremont’s story was one of the best we’d seen in a long while. The SEC apparently agrees.
If you haven’t read the original piece, go back and check it out. It’s a brave piece of reporting.