Litigation Release No. 25074 / April 20, 2021
Securities and Exchange Commission v. Hai Khoa Dang, No. 3:20-cv-01353 (D. Conn. filed September 10, 2020)
On April 19, 2021, the U.S. District Court for the District of Connecticut entered a judgment against unregistered investment adviser Hai Khoa Dang for defrauding a retired couple who had been his advisory clients for 20 years.
According to the SEC’s complaint, filed on September 10, 2020, Dang gained complete control over the couple’s brokerage accounts and misled them about his risky trading strategies, hiding the fact that he had depleted virtually all of their retirement savings within ten months. Dang allegedly led the couple to believe that he would invest the majority of their investment portfolio conservatively and would retain a minimum of $250,000 in cash in their accounts. As alleged in the complaint, Dang instead engaged in a risky and unauthorized options trading strategy, causing the value of the couple’s accounts to plummet from more than $2.2 million to approximately $27,000 between February 2018 and November 2019. Dang also allegedly lied to the clients about the losses, including misrepresenting that the value of the client’s positions were not reflected in the brokerage account statements.
The final judgment enjoins Dang from violating the antifraud provisions of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and orders him to pay $7,249 in disgorgement and pre-judgment interest and a $2,200,000 civil penalty.
The SEC’s case was handled by Jonathan Allen, David London, Mark Albers, and Michele Perillo of the Commission’s Boston Regional Office.
The SEC’s Retail Strategy Task Force and Office of Investor Education and Advocacy encourage investors to check the background of anyone selling or offering them an investment using the free and simple search tool on Investor.gov.