SEC’s enforcement division said L&L and Lee “created the appearance the company had a professional-management team in place when in reality Lee was single-handedly controlling company’s operations,” according to a statement; officials are also trying to bar him from being a certified public accountant.
In an annual report, L&L falsely listed Lee’s brother as CEO along with a CFO who had previously rejected an offer to serve in the role, said officials. “After Lee was confronted by the purported CFO in mid-2009, he continued to falsely represent to directors that the company had an acting CFO,” the SEC added. Prosecutors said inconsistencies began in 2008, and were reflected by annual reports over three years. In effect, they noted, mandatory certifications under the Sarbanes-Oxley Act were violated through a forged electronic signature.
Lee and L&L Energy are also accused of inaccurately maintaining documents to acquire a U.S. NASDAQ listing. In its complaint, the SEC has cited Section 10(b) violations of the Securities Exchange Act of 1934 and Rule 10b-5, and Section 17(a) of 1933’s Securities Act.