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Monday, February 24, 2020

SEC sues China business over allegedly concealing CFO resignation

By Shaun Zinck | Mar 10, 2015

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A federal lawsuit filed on March 3 alleged a Chinese infrastructure corporation attempted to conceal that its chief financial officer had resigned in 2011.

The U.S. Securities and Exchange Commission (SEC) filed the lawsuit against China Infrastructure Investment Corp. (CIIC), Chief Executive Officer Li Xipeng and Corporate Secretary Wang Feng alleging documents filed with the commission contained missing information and forged signatures.

Li Lei was hired as China Infrastructure's CFO on June 27, 2011, but on Sept. 21, 2011 he resigned his position for personal reasons effective immediately, the lawsuit alleged. Approximately a week after Lei's resignation, Feng told the independent director on CIIC's audit committee that Lei had decided to remain on as CFO for a transition period.

The SEC said in the lawsuit that the NASDAQ was considering delisting CIIC for not maintaining stock prices of at least $1. The suit alleged that Feng believed news of Lei's departure would have a negative impact on the company's stock prices, so he allegedly forged Lei's electronic signature in order to create the impression that the company still had a CFO. 

Lei also contacted the independent director in November 2011 informing them that his name still appeared as CFO on Yahoo! Finance.

The SEC is seeking an unspecified amount of civil penalties for the violation of federal law. 

The commission is being represented by Stephan J. Schlegelmilch and Melissa J. Armstrong, who are directly employed by the SEC.

United States District Court for the District of Columbia case number 1:15-cv-00307.

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