Thomas Chow, the former Syntax-Brillian Corp. chief procurement officer, was ordered to pay $48.5 million in a default judgment after he failed to respond to an insider trading lawsuit.
U.S. District Judge Susan Bolton in Phoenix yesterday entered the default judgment against Chow at the request of the U.S. Securities and Exchange Commission. Chow was ordered to pay $10.4 million in disgorgement, $2.57 million in prejudgment interest, a $4.68 million civil penalty, and a $30.9 million insider trading penalty.
The SEC in August sued Chow and two other former executives at the Tempe, Arizona-based maker of high-definition televisions, including Olevia, that went bankrupt in 2008. The former executives were accused of booking fake sales to artificially inflate the company’s earnings. The two other former executives agreed to settlements with the SEC last year.
“In the period when the price of Syntax’s stock was artificially inflated as a result of the fraudulent scheme, Chow, in possession of material non-public information about the scheme, sold nearly 2 million shares, and reaped illicit proceeds of more than $12.6 million,” SEC lawyers said in the Jan. 10 request for entry of default judgment.
Chow, who was also the founder of and co-owner of a Hong Kong company that created phony purchase orders for Syntax’s televisions, never answered or otherwise responded to the SEC’s allegations, according to the Jan. 10 request.
Helen Wong, a lawyer in Los Angeles listed on the court docket as Chow’s attorney, said in a telephone interview that she no longer represents him and that she didn’t think he was in the U.S.
The case is SEC v. Li, 11-1712, U.S. District Court, District of Arizona (Phoenix.)