Plaintiffs' Personal Injury Law Firm

Ponzi Scheme Targets Korean Americans

Earlier this month, the Securities Exchange Commission (SEC) filed claim against Mr. Peter C. Son and Jin K. Chung along with two companies they controlled, SNC Asset Management ('SNCA') and SNC Investments, Inc. ('SNCI'), for engaging in a ponzi scheme estimated at over $80 million.

The SEC alleges that together the accused told investors that SNCA generated steady annual income of 50 percent from foreign currency trading and promised that SNCA would provide them with annual returns of up to 36 percent. Between 2003 and 2008, Mr. Chung and Mr. Son raised more than $80 million from unsuspecting investors who believed that their money would be used for foreign currency trading. Over 500 investors were lured to this scheme from the United States, South Korea and Taiwan with promises of high returns from foreign currency trading, also referred to as 'forex trading.'

The fraud was perpetuated with monthly account statements being sent to investors from SNCA  showing substantial trading returns. At times, SNCA's bank account balance dropped under $100,000, while investor account statements purported to show balances in excess of $20 million. Unsuspecting investor were encouraged by the activity to both continue investing and to recommend SNCA to other investors.

The SEC's investigation revealed that instead of investing investor's money into forex trading, Mr. Son and Mr. Chung used investor funds for their own personal gain. The SEC claims that investor's funds were used for the following:

• Mr. Son used investor funds to pay the mortgage on his $2.6 million in an exclusive a gated community in DanvIlle, California, his homeowner's association dues, and his country club dues;

• Mr. Son used SNCA investor funds to pay his wife a salary of $3,000 per month even though she did not work for SNCA;

• Mr. Son and Mr. Chung transferred SNCA investor funds to SNCI to help it meet regulatory requirements that it maintain certain levels of capital; and

• Mr. Son and Mr. Chung transferred SNCA investor funds to SNCI's Korean bank account, to Son's Korean bank account, and to the Korean bank account of a Korean company under Chung's control.

Prior to the scheme's inevitable collapse in October 2008, Mr. Son and Mr. Chung drained SNCA's bank account and cut off all communications with investors. Before the collapse, SNCA transferred millions of dollars to Mr. Son, Mr. Chung, and a related entity, SNC Investments, Inc. ("SNCI"), including transfers to overseas bank accounts. By mid-November 2008, Mr. Son and Mr. Chung depleted SNCA's and SNCI's bank accounts, which currently hold less than $2,000 each.

The Securities Fraud Department of Napoli Bern Ripka LLP has attorneys and financial analysts ready to fight for your rights.  We continue to offer a FREE initial consultations and review of your trading account statement by our in-house analysts.  If you have been a victim of a ponsi scheme or have suffered losses because of your broker or brokerage firm's negligence or fraud, please feel free to contacts us and learn about your legal rights.

To learn more about this matter, we invite you to review the SEC's website or contact our office.