Companies Tied to Fugitive Chinese Billionaire Behind Right-Wing Social Network Must Pay SEC $539 Million Settlement

The Securities and Exchange Commission has penalized companies tied to Guo Wengui, the fugitive Chinese billionaire who fled the nation in 2014 and has since ingratiated himself with several prominent right-wing personalities in the U.S., to the tune of over half a billion dollars.

In a press release, the SEC announced it has reached a settlement with three media companies tied to Guo—GTV Media Group Inc., Saraca Media Group Inc., and Voice of Guo Media Inc.—for $539 million over claims that they conducted an “illegal unregistered offering of GTV common stock” and broke investor-protection laws while soliciting investments from over 5,000 individuals. The SEC also accused GTV and Saraca of promoting another illegal unregistered offering of a “digital asset security referred to as either G-Coins or G-Dollars.” According to the SEC, though the companies continually promoted an online platform where the two cryptocurrencies could be used for transactions, promising “a likelihood of significant returns,” neither of them ever bothered to develop it. Regulators also claimed the companies never made various mandatory disclosures to the SEC or the public.

The proceeds of both efforts were commingled, the SEC wrote, and came to around $487 million. In June 2020, the settlement alleges, Saraca transferred $100 million of the stock offering to a hedge fund that invested $30 million of it in currency speculation; the fund has since taken a loss of $29.2 million on that bet.

According to the Wall Street Journal, after some of the investors in the venture came to believe the three companies were fraudulent, Guo’s fan club started gathering outside the homes of critics:

The fundraising by GTV had deeply divided the Chinese diaspora in the U.S., with many investors in the venture later growing convinced that they had been defrauded. After some of these people began contacting the SEC and law enforcement, Mr. Guo attacked them repeatedly online, calling them proxies for China’s Communist Party. Supporters of Mr. Guo then began showing up at the homes of his detractors.

Though the three companies aren’t admitting wrongdoing in the settlement, according to the Journal, the cash totals amount to one of the biggest enforcement actions taken by the SEC this fiscal year (ending in September). The SEC press release doesn’t personally name Guo.

“Thousands of investors purchased GTV stock, G-Coins, and G-Dollars based on the respondents’ solicitation of the general public with limited disclosures,” Richard R. Best, director of the SEC’s New York Regional Office, said in the release. “The remedies ordered by the Commission today, which include a fair fund distribution, will provide meaningful relief to investors in these illegal offerings.”

Guo is at the center of a network of fringe media outlets, such as GTV, which relentlessly promote him and his worldview—including hoax claims about the novel coronavirus, which he believes the Communist Party of China (CPC) deliberately released as a bioweapon, and other conspiracy theories about the Chinese government.

Guo has sought to obscure his actual roles at a shady web of media entities that in some cases are only identifiable as tied to him because he has publicly indicated so. The offerings also allegedly involved some eyebrow-raising financial misdirection. For example, the Wall Street Journal previously reported that investors in the GTV offering were told to send funds to Voice of Guo Media, which would then invest it in GTV on their behalf.

Since moving to the U.S. he has become a social media powerhouse targeting members of the Chinese diaspora and cozied up to influential U.S. right-wingers, such as former White House chief strategist Steve Bannon, formerly the executive chairman of far-right outlet Breitbart. (When Bannon was arrested in August 2020 for his alleged role in a scheme to bilk Trump supporters with a bogus “Build the Wall” GoFundMe, he was on board Guo’s yacht.) When Jason Miller, one of Donald Trump’s senior aides, recently left the ex-president’s service, he did so to promote GETTR, a social media network apparently launched at least in part with funding sourced from Guo’s family foundation.

While GETTR originally served as a sort of clearinghouse for anti-CPC content and its promotional advertising was plastered with the logos of GTV entities, in late June, Guo announced the site’s servers would be wiped of all existing content and users, according to Politico. Days later, it relaunched as a free-speech haven for Trump supporters. It was promptly attacked by hackers, and it has mostly been in the news as of late after its near-total lack of moderation resulted in it being flooded with hentai, pro-Islamic State propaganda, and child sex abuse material. According to Vice, new user registrations had slowed to a crawl by late August, while many of the more prominent GETTR accounts like former Secretary of State Mike Pompeo’s have artificially inflated follower counts. Only 55,000 of GETTR’s 1.5 million users have posted more than 10 times, Vice wrote, and many of them were spambots.