Litigation Releases (Seong Yeol Lee and Ameritrust Corporation, et al.)

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26146 / September 30, 2024

Securities and Exchange Commission v. Seong Yeol Lee and Ameritrust Corporation, et al.

, No. 3:23-cv-00125 (D. Conn., filed Feb. 1, 2023)

SEC Obtains Final Judgments in Microcap Fraud Case

The Securities and Exchange Commission announced that on September 27, 2024, the U.S. District Court for the District of Connecticut entered judgment against the estate of defendant Seong Yeol Lee in a microcap fraud case filed by the SEC in 2023. The judgment orders disgorgement of $3,255,668 and prejudgment interest of $589,000. Those amounts are deemed satisfied by the transfer of Lee's frozen funds to the Commission and proceeds from the sale of property in New York that the Commission alleges Lee improperly purchased with misappropriated investor money. Without admitting or denying the allegations in the SEC's complaint, Lee's estate consented to the entry of the judgment.

The SEC's action alleged that Ameritrust and its CEO, Lee, misled and stole funds from investors in the United States and the Republic of Korea between at least 2019 and 2023. The SEC's complaint alleged that, through a network of recruiters acting at his direction, Lee solicited more than $20 million from investors primarily in the Republic of Korea, who sent money to corporate and personal bank accounts that Lee controlled in the United States to buy shares of Ameritrust, a publicly traded company in the United States. Lee, either directly or through his recruiters, allegedly told investors that their money would be used to buy shares in a U.S.-based company that would be listed on a national stock exchange, guaranteeing profits for anyone holding the shares. In reality, the SEC's complaint alleged, Ameritrust had no real operations and did not apply for any exchange listing. According to the SEC's complaint, Lee misappropriated investor funds by transferring money from corporate bank accounts to his personal bank accounts and to his family members. Lee also allegedly received or held investor funds in accounts of Beespoke Capital, an entity affiliated with Lee and Ameritrust.

The court also entered judgments requiring the payment of disgorgement by three of Lee's adult children whom the SEC named as relief defendants in the complaint. Without admitting or denying the allegations in the SEC's complaint, each of the relief defendants consented to the entry of judgment.

The court previously entered default judgments against defendant Ameritrust and relief defendant Beespoke Capital. The judgment against Ameritrust prohibits it from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10(b)-5 thereunder, and ordered it to pay disgorgement of $11,967,705, plus prejudgment interest of $1,602,391, and a civil penalty of $2,232,280. The judgment against Beespoke Capital ordered it to pay disgorgement of $4,871,097, plus prejudgment interest of $325,421.