CHINA UNITED INSURANCE SERVICE, INC. (OTCMKTS:CUII) Files An 8-K Other Events
Item 8.01. Other Events.
As previously disclosed in the Original Filing, the Company and Mr. Huang, one of CUIS’s former employees, agreed to settle fraud charges brought by the SEC relating to a scheme to manipulate the Company’s trading volume. Neither the Company nor Mr. Huang realized financial gain from the scheme and both CUIS and Mr. Huang substantially cooperated with the SEC’s investigation into the activities that led the SEC to bring the fraud charges.
The SEC’s complaint (the “SEC’s Complaint”) alleged that, from approximately December 2013 through March 2018, the Company and Mr. Huang schemed to deceive the investing public and Nasdaq, for the purpose of obtaining a listing on Nasdaq, that the trading volume in the Company’s common stock was derived from bona fide market activity. Mr. Huang, acting on the Company’s behalf, used multiple brokerage accounts to engage in numerous transactions in the Company’s common stock. When Mr. Huang’s trading was flagged by a U.S.-based brokerage firm for high volume and possible prearranged trading and several of the accounts were frozen, Mr. Huang and two colleagues contacted the brokerage firm and made false statements about their identities, their relation to the Company and their reasons for trading.
The SEC’s Complaint alleged that the Company and Mr. Huang violated the antifraud provisions of Section 17(a) of the U.S. Securities Act of 1933, as amended, and Section 10(b) of the Securities and Exchange Act of 1934, as amended, and Rule 10b-5 thereunder. Without admitting or denying the allegations in the complaint, both CUIS and Mr. Huang agreed to the entry of a final judgment (the “Final Judgment”) that enjoins them from violating the charged provisions of the federal securities laws, orders the Company to comply with its undertaking to retain an independent compliance monitor for a period of not less than one year, and orders Mr. Huang to pay a penalty of $30,000. Based upon the Company’s substantial cooperation with the SEC’s investigation, the SEC did not seek a monetary penalty against the Company.
On January 18, 2019, the Final Judgment was entered by the District Court.
The SEC’s Complaint, the Final Judgment, the Company’s Consent and Mr. Huang’s Consent are attached hereto as Exhibits 99.1, 99.2, 99.3 and 99.4, respectively, and are incorporated by reference into this Amended Report.
Caution Regarding Forward-Looking Statements
This Amended Report includes information that constitutes forward-looking statements. Such forward-looking statements often contain words such as “believe,” “expect,” “anticipate,” “intend,” or “will,” although not all forward-looking statements contain these identifying words. By their nature, forward-looking statements address matters that are subject to risks and uncertainties. Examples of such forward-looking statements include, but are not limited to, statements of our expectations regarding the matters described above.
These forward-looking statements are based on our current beliefs, assumptions and expectations concerning future events, which, in turn, are based on information currently available to the Company. Such forward-looking statements include actions taken by the Company, the SEC or the District Court with respect to the matters covered by this Amended Report . Although we believe that the expectations underlying any of these forward-looking statements are reasonable, these expectations may prove to be incorrect and all of these statements are subject to risks and uncertainties. A variety of factors could cause actual events or results to differ materially from those expressed or contemplated by the forward-looking statements including, without limitation, additional information that may become known to the Company in connection with the matters that are the subject of this Amended Report or that subsequent events may occur that require the Company to take additional action with respect thereto.
All forward-looking statements included in this Amended Report are expressly qualified in their entirety by these cautionary statements and the Company undertakes no obligation to publicly update or revise any forward-looking statement except to the extent required by applicable securities laws.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Exhibit | |
| 99.1 | Complaint Dated December 20, 2018, filed with the United States District Court for the Southern District of New York by the Securities and Exchange Commission, Plaintiff, against China United Insurance Service, Inc. and Cheng-Hsiung Huang, Defendants; Civil Action No. 18; CV: 12055 (incorporated by referenced to Exhibit 99.1 to the Current Report on Form 8-K filed on December 26, 2018). | |
| 99.2* | Final Judgment Dated January 18, 2019, entered by the United States District Court for the Southern District of New York with regards to the Securities and Exchange Commission, Plaintiff, against China United Insurance Service, Inc. and Cheng-Hsiung Huang, Defendants; Civil Action No. 18; CV: 12055. | |
| 99.3 | Consent, Dated November 29, 2018, of Defendant China United Insurance Service, Inc. with respect to Civil Action No. 18; CV: 12055, filed with the United States District Court for the Southern District of New York by the Securities and Exchange Commission, Plaintiff, against China United Insurance Service, Inc. and Cheng-Hsiung Huang, Defendants (incorporated by referenced to Exhibit 99.3 to the Current Report on Form 8-K filed on December 26, 2018). | |
| 99.4 | Consent, Dated December 6, 2018, of Defendant Cheng-Hsiung Huang with respect to Civil Action No. 18; CV: 12055, filed with the United States District Court for the Southern District of New York by the Securities and Exchange Commission, Plaintiff, against China United Insurance Service, Inc. and Cheng-Hsiung Huang, Defendants (incorporated by referenced to Exhibit 99.4 to the Current Report on Form 8-K filed on December 26, 2018). |
* filed herewith
China United Insurance Service, Inc. Exhibit
EX-99.2 2 tv511314_ex99-2.htm EXHIBIT 99.2 Exhibit 99.2 Case 1:18-cv-12055-OTW Document 11 Filed 01/18/19 Page 1 of 9 UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK : SECURITIES AND EXCHANGE : COMMISSION,…
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About CHINA UNITED INSURANCE SERVICE, INC. (OTCMKTS:CUII)
China United Insurance Service, Inc. (China United) operates in Taiwan and China through its subsidiaries Action Holdings Financial Limited (AHFL) and ZLI Holdings Limited (CU Hong Kong), respectively. AHFL holds shares of Law Enterprise Co., Ltd. (Law Enterprise), a company based in Taiwan. Law Enterprise holds shares of Law Insurance Broker Co., Ltd. (Law Broker), Law Risk Management & Consultant Co., Ltd. (Law Management) and Law Insurance Agent Co., Ltd. CU Hong Kong owns Law Anhou Insurance Agency Co., Ltd. (Anhou), which provides insurance agency services in the People’s Republic of China. Law Broker and Anhou markets and sells insurance products: life insurance products, and property and casualty insurance products, both focused on meeting the particular insurance needs of individuals. The insurance products that Law Broker and Anhou sell are underwritten by certain insurance companies in Taiwan and China, respectively.
