A federal judge on Thursday granted the regulator's request for an asset freeze over entities operating as WCM and WCM777, which are based near Los Angeles and in Hong Kong and run by Ming Xu of Temple City, California.
WCM and WCM777 allegedly raised more than $65 million since March 2013 by promising people they could double their money in 100 days by investing between $399 and $1,999 in cloud services such as website hosting, data storage and software support.
But instead, according to the SEC, Xu and the WCM entities would use some new money to pay older investors, and spent other funds on two California golf courses and other properties, and to play the stock market. Xu is also known as Phil Ming Xu.
U.S. District Judge Christina Snyder in Los Angeles imposed the asset freeze and ordered a temporary receiver over the defendants' assets. The SEC is also seeking to recoup illegal gains and impose civil penalties.
The case is SEC v. World Capital Market Inc et al, U.S. District Court, Central District of California, No. 14-02334.