U.S. SEC fines Guo Wengui-linked media firms for illegal securities offerings

© Reuters. FILE PHOTO: The seal of the U.S. Securities and Exchange Commission (SEC) is seen at their headquarters in Washington, D.C., U.S., May 12, 2021. REUTERS/Andrew Kelly/File Photo

By Chris Prentice

(Reuters) -Three media companies affiliated with Chinese businessman Guo Wengui have agreed to pay more than $539 million to settle U.S. Securities and Exchange Commission (SEC) charges they illegally sold stock and digital assets to thousands of investors, the regulator said on Monday.

The SEC charged New York-based GTV Media Group Inc and Saraca Media Group Inc and Phoenix-based Voice of Guo Media Inc with the illegal unregistered offering of GTV common stock. GTV and Saraca were also charged with the illegal unregistered offering of a digital asset security called G-Coins or G-Dollars.

The firms solicited thousands of individuals to invest in the GTV stock offering from April through June 2020 through the firms' websites and on social media platforms, according to the SEC. GTV and Saraca also solicited individuals to invest in the digital asset offering. Altogether, the firms raised about $487 million from more than 5,000 investors through the offerings.

The companies did not admit or deny the SEC's findings. An attorney for GTV and Saraca said the firms were pleased to reach a resolution and return funds to supporters. An attorney for Voice of Guo Media did not respond to a request for comment.

GTV has also reportedly been linked to Steve Bannon, a former top political strategist for former President Donald Trump. Neither Bannon nor Guo were accused of any wrongdoing in the SEC's charges.

To settle the charges, GTV and Saraca agreed to disgorge over $434 million plus prejudgment interest of approximately $16 million, and to each pay a civil penalty of $15 million, the SEC said.

Voice of Guo also agreed to a cease-and-desist order, to pay disgorgement of more than $52 million plus prejudgment interest of nearly $2 million, and to pay a civil penalty of $5 million.