Warren Buffet Wannabe Slammed for Ponzi Scam

     DALLAS (CN) – A hedge fund manager who touted himself as the “Chinese Warren Buffett” must disgorge more than $11.7 million in profits from a massive Ponzi scheme, a federal judge ruled.
     Click here to check out Courthouse News’ Securities Law Review.
     U.S. Magistrate Judge Renee Toliver recommended on Wednesday that Weizhan Tang and three of his companies – Oversea Chinese Fund, Weizhan Tang & Associates and Weizhan Tang – pay over $9.12 million in disgorgement and over $2.66 million in prejudgment interest.
     The defendants were sued in 2009 by the Securities and Exchange Commission for violating the Securities Exchange Act of 1934 and the Investment Advisors Act. An agreed interlocutory judgment, entered with the consent of the defendants, allowed the court to set proper disgorgement and civil penalties upon motion of the SEC.
     The SEC said Tang sold Chinese-American victims limited partnership interests in WinWin Limited Capital Partnership, a Texas-based entity he controlled. WinWin existed solely to investing partnership capital in the hedge fund.
     “As of March 10, 2009, WinWin Partners has raised almost $17.3 million in principal investments from approximately 75 investors, most of which are located in the Dallas area,” according to the complaint. “These investors have withdrawn approximately $8.4 million from the hedge fund, of which at least $700,000 was paid out as purported profits. Nearly $9.6 million in investor principal remains unaccounted for. Consistent with his recent confession to investors, funds invested with WinWin Partners were used to pay other investors in a Ponzi fashion.”
     After confessing to investors, Tang sent emails asking them to trust him with even more of their money, the SEC said.
     “Within the last two weeks, Tang has informed investors that he is actively raising an additional $1 million to ‘recoup’ investor losses and creating new business entities, bank accounts and brokerage accounts to circumvent action by the Commission and/or the Ontario Securities Commission,” the complaint stated.

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