The Securities and Exchange Commission (SEC) has charged a podcaster and entrepreneur known as the “Cash Flow King” in an 11 million dollar Ponzi scheme.
The SEC alleges that Stephen Hui, the lead behind the Cash Flow King Podcast, had used his website and podcast to lure investors into investing in his Ponzi scheme which was built to defraud investors out of their hard-earned money.
Hui allegedly convinced investors to transfer funds on the false promise of guaranteed returns from investing in a fictional “Forex Exchange Investment Program” and awarded new investors high rates of return on previously invested funds.
From October 2017 to June 2019, over 47 investors funded the scheme with 11 million dollars and Hui used this money to fund his lavish lifestyle, which included buying cars, vacations, and clothing.
The SEC also charged a company used by Hui to perpetrate the scheme called COVE Media LLC as well as Hui’s wife, Ava Hui. All three defendants have agreed to pay back all of the investors’ money, as well as a penalty and interest.
Hui has also offered a stipulated judgement, in which he has agreed to a permanent injunction from defrauding investors and offering securities. He has also agreed to pay over 4 million dollars in ill-gotten gains and penalties – which will be returned to the defrauded investors.
This case serves as a reminder to investors that, just because the person offering a deal may seem trustworthy, it is still important to perform due diligence and research any investment opportunities to make sure they aren’t being taken advantage of.
Even after Hui’s punishment, the SEC will continue to remain vigilant in pursuing those who engage in fraudulent activity and protect investors from exploitation, abuse, or deception.
