The U.S. Securities and Exchange Commission (SEC) has recently filed a civil injunction lawsuit against Touzi Capital Investment Company and its Asian founder Eng Taing, accusing them of fraudulent activities in the unregistered securities issuance that deceived over a thousand investors and raised more than $100 million. The complaint filed by the SEC alleges that Taing misled investors through commingling and misappropriation of investor funds, as well as making false and misleading statements about key factors such as investment liquidity and profitability to raise funds.
According to the SEC complaint, from 2021 to early 2023, Taing and Touzi Capital issued unregistered securities, claiming to raise funds for a specific cryptocurrency mining project, attracting over 1,200 investors nationwide and raising nearly $95 million. However, the SEC alleges that part of the funds was not used for cryptocurrency mining but instead was mixed with other business or even diverted for Taing’s personal expenses. Additionally, the defendants misled investors about the profitability of the company’s operations.
Furthermore, Touzi Capital raised nearly $23 million for its debt recovery business but mingled some of the funds with the cryptocurrency mining business and other unrelated ventures.
SEC also accuses Taing and Touzi of making significant false statements about the stability of these investments, such as making unrealistic comparisons with high-yield money market accounts, obscuring the high-risk and low liquidity nature of the investments, and continuing to raise funds after the investment projects failed.
SEC has filed a lawsuit in the Southern District of California Federal Court, alleging that Taing and Touzi Capital violated the registration and anti-fraud provisions of the 1933 Securities Act and related provisions of the 1934 Securities Exchange Act. SEC is seeking permanent injunctions against the defendants, disgorgement of ill-gotten gains plus pre-judgment interest, imposition of civil penalties, and prohibiting Taing from serving as a corporate executive or director.