Washington, DC (STL.News) The Securities and Exchange Commission today charged Connecticut-based investment adviser Hai Khoa Dang with defrauding a retired couple who had been his clients for 20 years.
The SEC’s complaint alleges that, in 2018, 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. As set forth in the complaint, Dang 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, 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. The complaint alleges that Dang 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. As further alleged in the complaint, Dang misrepresented to the clients that he was associated with a registered broker-dealer, when, in fact, Dang’s securities licenses had all lapsed and his last affiliation with any registered entity was in 2006.
The SEC’s complaint, filed in federal court in Connecticut, alleges that Dang violated the antifraud provisions of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The SEC seeks a permanent injunction, disgorgement plus prejudgment interest, and a civil penalty.
The SEC’s case is being handled by David London, Jonathan Allen, Mark Albers, and Michele T. Perillo of the Boston Regional Office.