Seong Yeol Lee and Ameritrust Corporation, et al.

Litigation Release No. 25638 / February 13, 2023

Securities and Exchange Commission v. Seong Yeol Lee and Ameritrust Corporation, et al., No. 3:23-cv-00125 (D. Conn. filed Feb. 1, 2023)

The Securities and Exchange Commission announced that on February 10, 2023, the court entered a temporary order granting certain emergency relief, including a freeze on some assets, in the SEC’s pending action, filed earlier in February 2023, against Connecticut resident Seong Yeol Lee and Ameritrust Corporation, a public company Lee controls. The court’s order also provides for a temporary asset freeze against two entities associated with Lee and Ameritrust. The SEC’s action alleges that Lee and Ameritrust misled and stole at least $4 million from investors in the United States and the Republic of Korea.

The court’s temporary order, to which all parties agreed, prohibits Lee and Ameritrust from violating certain antifraud provisions of the securities laws and from soliciting or accepting funds from investors. The court’s temporary order also freezes assets in certain bank accounts of Ameritrust and two affiliated entities named as relief defendants in the SEC’s action. The court’s temporary order will be in effect for sixty (60) days, to allow time for Lee and Ameritrust to retain counsel to represent them in the SEC’s action. By agreeing to the entry of the temporary order, Lee and Ameritrust do not admit to any wrongdoing and do not waive any rights to assert any defenses in the SEC’s action.

The SEC’s complaint alleges that, through a network of recruiters acting at his direction, Lee solicited more than $20 million from investors primarily in the Republic of Korea, who sent money to corporate and personal bank accounts that Lee controls in the United States to buy shares of Ameritrust, a publicly traded company in the United States. Lee, either directly or through his recruiters, allegedly told investors that their money would buy shares in a U.S.-based company that would be listed on a national stock exchange, guaranteeing profits for anyone holding the shares. In reality, the complaint alleges that Ameritrust has no real operations and has not taken any steps to apply for any exchange listing. According to the SEC’s complaint, Lee misappropriated at least $4 million of investor funds by transferring money from corporate bank accounts to his personal bank accounts and to three of his adult children, who are also named as relief defendants in the SEC’s action. Lee and Ameritrust also allegedly defrauded the public by making materially false statements or failing to disclose material information in Ameritrust’s filings with the Commission.

The SEC’s complaint charges Lee and Ameritrust with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10(b)-5 thereunder. In addition to seeking emergency relief, the SEC’s complaint seeks permanent injunctive relief, disgorgement plus prejudgment interest, and civil penalties against Lee and Ameritrust, and an officer and director bar and penny stock bar against Lee.

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