Wealthy Chinese businessman Guo Wengui, an outspoken critic of China’s government, and several others are accused of breaking state securities laws in a class-action lawsuit filed in Arizona.
The civil complaint was filed in late June in the U.S. District Court for the District of Arizona. The plaintiffs claim to have tried to invest in GTV Media, a private media company linked to Guo, only to never see any proof that their money actually went toward the business.
Attorneys for Guo and other defendants called the allegations “unfounded” in an email to CNBC on Monday.
GTV’s website shows Guo as one of their main attractions, and research done by Graphika notes that the company is part of the businessman’s larger media empire.
“Each of these investors have not received a single cent back in return for the investment of their hard-earned money, even upon request for redemption, indicating the investments were anything but real, let alone risk-free or lucrative,” the filing says. “Nor have the investors received anything resembling proof of their investment or ownership interest. Instead, they are left with worthless paper or none at all.”
The legal fight also could provide a glimpse into the way funds were raised for GTV.
The Wall Street Journal reported last year that the fundraising efforts were being investigated by the Securities and Exchange Commission and the Federal Bureau of Investigation. The investigators were reportedly investigating GTV Media for possibly violating securities laws.
GTV Media said in a statement to the Journal at the time that it moved ahead with the private placement under the advisement of its attorneys and “all of the raised funds are intact.” The company also said it was ready to comply with federal authorities.
Another Journal report said Guo himself was being investigated by the FBI. A lawyer for Guo told the newspaper at the time that Guo had not been contacted by the FBI.
The FBI and SEC did not respond to requests for comment before publication. Federal investigators haven’t publicly announced any charges.
Guo has been a vocal critic of the Chinese Communist Party and has used his live digital shows on GTV to blast the heads of the Chinese regime. Guo fled China in 2014 in anticipation of corruption charges. After he criticized China’s leaders, warrants were reportedly issued for his arrest on charges that included corruption and bribery. Guo has denied the charges.
Former Trump White House chief strategist Steve Bannon has been close to Guo for years. Bannon was involved with the media group, the Journal has reported. The newspaper also previously reported on financiers of the same media organization who also allege they were defrauded. Bannon is not listed as a defendant on the Arizona-based class-action suit. A spokesperson for Bannon did not respond to requests for comment.
The Graphika report claims that the businesses and foundations tied to Guo comprise a network that “acts as a prolific producer and amplifier of mis- and disinformation, including claims of voter fraud in the U.S., false information about Covid-19, and QAnon narratives.” A representative for Guo has previously denied that the Chinese businessman controls content on GTV.
The plaintiffs are seeking to recover damages. The suit alleges Guo and other defendants violated multiple state laws including the sale of unregistered securities and the fraudulent sale of securities.
It is unclear how much these investors aim to recover in damages. The complaint alleges that a colleague of Guo’s and an arm of the media company eventually raised at least $117 million from mainly inexperienced investors.
The attorneys for plaintiffs listed in the complaint told CNBC they have no interest in turning the case into a media event.
“We do not intend to litigate this case in the press. We do intend to pursue this action vigorously in the courts to vindicate the rights of the plaintiffs and the other defrauded investors,” Benjamin Y. Kaufman of the law firm Wolf Haldenstein said in an emailed statement Monday.
The attorneys listed as representing Guo and other defendants said they were prepared for a court battle.
“With respect to the Arizona lawsuit, our comment is simply that we will respond and vigorously defend our client in court against all of the unfounded allegations,” Jeffrey S. Gavenman of the law firm Schulman Bhattacharya told CNBC in an email.
A judge ruled this month that Guo and the other defendants have until September to speak with their accusers to “provide notice regarding any intent to move to dismiss the Complaint and, if so, the grounds upon which they intend to move.”
The case might not end up a big problem for Guo, unless something comes out during the discovery process, according to a lawyer who has been involved in cases against the Justice Department and the SEC.
“I am sure Mr. Guo, wherever he is, on whatever yacht or whatever palace or palatial apartment, I don’t think this caused him to get less than eight hours of sleep. This is to him, I’m sure, the cost of doing business,” Randy Zelin told CNBC.
According to the lawsuit, there were apparently two forms of investments Guo offered through his public broadcasts last year to people interested in funding GTV Media.
The lawsuit cites public comments made by Guo in which he claims those who meet the minimum $100,000 direct investment could go through “private placements,” although the lawsuit says that was “put in place to give supposed imprimatur of a legitimate and above-board operation and provide a veneer of only being available to accredited investors.”
Guo directed investors who could not meet the $100,000 threshold to go through Sara Wei, the lawsuit says. According to Wei’s LinkedIn page, she at least once had a leadership role at another Guo-linked media group, Voice of Guo Media. Wei’s lawyer is not listed on the complaint, and a representative for her could not be reached.
“Investors were told Ms. Wei was to pool the smaller sums of money and invest them in GTV through another entity, defendant Voice of Guo Media, Inc. (‘VOG’), on their behalf. Each of the Plaintiffs and the Class were such investors that invested in GTV securities through Ms. Wei and/or VOG,” the lawsuit says.
A representative for GTV told the Journal last year that it didn’t accept any money from Voice of Guo Media as part of the fundraising.
However, the plaintiffs allege that “having taken the investors’ money, Ms. Wei and VOG neither purchased shares of GTV nor returned the money to investors. They either kept the investors’ money for themselves or their affiliates; gave it to Guo, GTV, or some an entity associated with Guo without obtaining shares in GTV; or did some combination of both.”
The plaintiffs said they and other interested investors were told by Wei that they need to show proof they are donors to either the Rule of Law Society or the Rule of Law Foundation, two nonprofits with ties to Guo, in order to “qualify to invest.” CNBC reported on departures from the two foundations’ boards, including Bannon. Representatives for the foundations did not respond to requests for comment.
“Ms. Wei told investors, in Chinese, that ‘the first thing I need from you is your proof of donation to Rule of Law Foundation,'” the lawsuit says, noting that it was an unofficial translation. Wei continued, according to the suit: “Then, you need to tell me if you have more or less than $100,000. You must let me know. If it’s more than $100,000 I will contact the headquarter, if it’s less than $100,000, us VOG will collectively do it for you.”
Investors eventually became concerned with their initial investments in GTV. They inquired, but “no concrete information was forthcoming from Defendants,” the suit says.
Wei initially told investors last year, according to the complaint, that “the delay in confirming receipt of the investors’ transfers and in countersigning the Limited Purpose Agency Agreement was caused by Wells Fargo and Chase putting a portion of the funds on hold.”
The plaintiffs also claim that it was still unclear what happened to their investments even as federal authorities began investigating and as Wei allegedly said she was able to get the funds released from the banks.
After the federal investigation into GTV’s fundraising practices became public, investors who sent their money through the Voice of Guo began to request refunds from Wei and Guo himself, according to the legal complaint.
“Between August 2020 and the end of that year, Ms. Wei continued to ask VOG investors to wait patiently while she and her associates reached out to allegedly over 8,000 VOG investors to confirm receipt of their transfers before she could issue any refunds. Periodically, investors were asked to fill out Google forms designed to gather identifying information of the transfers they made,” the lawsuit says.
Guo and Wei also had a fallout, which complicated things further, the suit says.
“Based on information and belief, around the end of 2020, Mr. Guo and Ms. Wei reportedly had a fallout, which led to a halt in VOG and Ms. Wei’s supposed refund process,” the lawsuit says. “Each holding a portion of the $117 million, Mr. Guo and Ms. Wei each began blaming the other for defrauding the investors who sent money to Ms. Wei and/or VOG.”
The suit adds: “In 2021, Ms. Wei and Guo began to tell investors that they could no longer refund investments because of the ongoing SEC investigation.”
City of Brandon – September 18th Media Release – City of Brandon –
For the last 24 hours:
Stolen Vehicle Recovered:
At about 9:30 AM Friday morning, a vehicle stolen from Winnipeg was located unoccupied in the 300 block Louise Avenue, by a member on patrol. The vehicle was seized and towed to BPS where it was subjected to a forensic examination.
Fire in Apartment Complex:
At 1:12 PM Friday, a resident of an apartment within 1400 Pacific Avenue reported fire alarms were sounding in his unit. Members attended and found an active fire within the suite, which was quickly extinguished. Investigation revealed that the fire was caused accidentally when the tenant set a bag of groceries on the stove, incidentally turning a burner on, which ignited some of the contents of the grocery bag.
Arrest Warrants Executed:
A 41 year-old male was arrested on the strength of an arrest warrant on Friday evening after being checked in the 1000 block Victoria Avenue. A police records checked showed he was wanted for failing to attend for identification. He was processed and released to appear in court on a later date.
A 33 year-old female rom Winnipeg was arrested for possession of property obtained by crime after a vehicle was stopped on the TransCanada Highway. An arrest warrant, held by the Winnipeg Police Service for the noted offence, was returned during a records query. The accused was released from custody to appear in court in Winnipeg on December 14th.
An unendorsed warrant for arrest for a 36 year-old Brandon man was executed just before 2:00 AM this morning. The male was wanted for failing to comply with conditions of an undertaking. He was held in custody and will appear before the court today.
Boissevain RCMP arrested a 61 year-old male resident of Hartney, MB on the strength of an arrest warrant held by BPS, for failing to attend court. The accused was later released from custody and is scheduled to appear in court on November 29th.
Ste Rose RCMP arrested a 43 year-old male during the course of an investigation and learned that BPS held an endorsed warrant for arrest for failing to attend for identification. The accused will appear before the court today on all charges.
Failing to Comply with Orders:
A 22 year-old female was checked by police in the 0-00 block 10th Street just before midnight Friday night. She was found to be bound by an undertaking that included a daily curfew condition, which the accused was breaching. She was processed and released to appear in court on December 16th.
A 47 year-old male was also arrested for violating a curfew condition of a release order. At 4:20 AM this morning, the accused was located in the 0-00 block 9th Street, well outside of his 9:00 PM – 8:00 AM curfew. He too was processed and released to appear in court on December 16th.
Four males were held overnight under the Intoxicated Persons Detention Act after being located in separate incidents, and being intoxicated to the point they were unable to safely care for themselves. They will be released once they are more sober.
RELEASE AUTHORIZED BY:
Acting Staff Sergeant D. Lockkhart, #101
Anyone with information on any unsolved crime is asked to call Brandon Crime Stoppers at 204-727-(TIPS) 8477, www.brandoncrimestoppers.com or by texting BCSTIP and your message to CRIMES (274637). Crime Stoppers pays up to $2000.00 cash for information that leads to the solution of a crime.
CRIME STOPPERS 204-727-TIPS
How the party platforms compare on future of CBC, media supports – CBC.ca
The media, including broadcasting and streaming, were the topic of much debate in the months leading into the election.
Of particular interest to the public was Bill C-10, which was introduced by the Liberals and would have required many digital media companies to promote Canadian content. The bill was controversial, and it did not become law before the election was called.
Debates have raged during the Liberal government about whether Canada’s media industry should receive government support as ad revenues fall, and whether CBC/Radio-Canada should change its programming and funding model.
The parties have made some significant pledges when it comes to media and the public broadcaster. Here are the highlights:
If the Liberals are re-elected, their platform pledges to introduce legislation that would require digital platforms, such as Facebook, to share a portion of revenue generated from news content with Canadian news outlets.
“This legislation would be based on the Australian model and level the playing field between global platforms and Canadians news outlets,” the platform says.
Similarly, the Liberals are pledging to reintroduce legislation to change Canada’s Broadcasting Act. They’ll make it a requirement for foreign web giants, such as YouTube and Netflix, to promote Canadian content.
The Liberals are also promising to extend insurance coverage related to the COVID-19 pandemic for media production stoppages. They also say they’ll double the government’s current contribution of to the Canada Media Fund to support Canadian television production.
When it comes to CBC, the Liberals want to “update CBC/Radio-Canada’s mandate to ensure that it is meeting the needs and expectations of today’s Canadian audiences with unique programming that distinguishes it from private broadcasters.”
They say they’ll provide $400 million over four years to CBC with the aim of making the public broadcaster less reliant on private advertising during news and current affairs programs.
At a press conference in Aurora, Ont., on Monday, Justin Trudeau said his party will always support the media.
“I am happy to stand here and defend the work that media does as an essential part of our democracy,” he said. “We will always be there to support and thank members of the press for doing the important work of bringing things forward, of challenging all parties and anyone who wants to lead this country, and holding leaders to account.”
Like the Liberals, the Conservatives are also proposing that Google and Facebook pay royalties for Canadian news content — adding that they will look at best practices from countries that have taken a similar approach, such as Australia and France.
They’ll also do a “full review” of the CRTC’s mandate, with a focus of “ensuring that it better reflects the needs of Canadians and doesn’t prevent Canadian broadcasters from innovating and adapting to changes in the market.”
They’re promising to repeal Bill C-10, which was the Liberal effort to require web giants to promote Canadian content. Instead, they are promising an alternative approach that would require digital streaming services to reinvest a “significant” amount of their Canadian revenue into making original Canadian programs.
The Conservatives are pledging to end the media bailout initiated by the Trudeau government in 2019, when it set aside nearly $600 million over five years to support media outlets.
“While we support Canadian media outlets, they should not be directly receiving tax dollars,” their platform reads. “Government funding of ‘approved’ media undermines press freedom, a vital part of a free society.”
When it comes to CBC, the Conservatives pledge to review the mandate of CBC English TV, including CBC News Network, and also English digital news. The platform adds that the review would look at the viability of a “public interest model like that of PBS in the United States, ensuring that it no longer competes with private Canadian broadcasters and digital providers.”
They’re also proposing a separate legal and administrative structure for Radio-Canada, while also ensuring the French-language broadcaster does not charge user fees for its streaming services or operate a sponsored content department.
At an announcement in Saint John earlier this week, O’Toole said he does not believe CBC should compete with the private sector in certain areas.
“The public interest mandate is critical in terms of rural communities being connected, in terms of keeping Canadians informed, and that’s the public interest side I like,” he said.
“What I don’t like is competition with the private sector that is holding on by a thread … in English television and in digital, competing and hollowing out jobs in the private sector, leading to less choice, less options, less voices.”
He also reaffirmed that his government would end public financial support for media outlets.
“We also have to look to end the direct government supports to media, but work with them to try and make sure they transition to the digital space, to this new media environment,” he said. “We need to balance the playing field with the American web giants, and we will do that, while protecting freedom of speech and Internet freedom.”
The NDP are also promising changes to the Broadcasting Act, with an aim of creating “a level playing field between Canadian broadcasters and foreign streaming giants,” according to its platform.
The platform says the party will make Netflix, Facebook, Google and other digital media companies pay corporate taxes and contribute to Canadian content in both English and French.
“Most Canadians now get their news from Facebook, and Netflix is the largest broadcaster in the country,” the platform says. “But despite the Liberals promising to take action, these web giants still don’t pay the same taxes or contribute to funding Canadian content in the same way traditional media do.”
The party says it will put a priority on partnering with independent Canadian producers and on increasing funding for TeleFilm and the Canada Media Fund, although it doesn’t say how much.
The NDP is pledging to increasing funding for CBC and Radio-Canada “to help reverse the damage of decades of funding cuts under both Liberal and Conservative governments.” The platform doesn’t specify an amount.
But in an interview with the advocacy group Friends of Canadian Broadcasting, Singh said he’d look into bringing funding for the public broadcaster to levels seen in other countries.
“I want us to get to a point where we’re not among the lowest funded in the world. We need to be competitive with what other jurisdictions are doing. … We want to have properly funded, well-funded public broadcasting,” he said. “I’m definitely prepared to increase [funding].”
The People’s Party has said during the campaign that it would end the media bailout “to guarantee that Canada has a free and independent press,” according to a news release from the party.
With regard to CBC/Radio-Canada, the People’s Party would either defund and privatize it, or it would change the funding model to a partly donor-driven one like those with NPR and PBS in the United States.
“What we need are free and independent media, not media that are dependent on the government for their survival and profitability,” PPC Leader Maxime Bernier said in a statement.
The Green platform says the party is in favour of regulating social media platforms and streaming services through the CRTC “as envisioned in Bill C-10.”
The party also wants the CRTC to reserve more bandwidth for independent and non-profit stations, and it is pledging to create an independent commission to study the concentration of media ownership in Canada.
With respect to CBC, the party says it will “provide a stable base-funding” for CBC’s English and French operations, but additionally wants to see programs in Indigenous languages and programming that encourages learning of Indigenous languages.
Social media strategies played important role in pandemic election: experts – CTV News
Bakhtawar Khan excitedly waited, her friend holding two cellphones and a camera, for her turn to get a photo with NDP Leader Jagmeet Singh.
The 20-year-old, like most people showing up to political rallies across the country, wanted to share the image with friends and followers on social media.
“I feel like a lot of people are telling me not to vote for NDP because it will be a split with the Liberals,” Khan said. “But the way I look at social media, I don’t think it will be true this year.”
Khan, like people across the country, says she gets all her political and election information from social media.
During the COVID-19 pandemic, people have been spending even more time on their social media and all the political parties are hoping to take advantage to tap directly into their voter base. But just because someone likes or shares a political post doesn’t necessarily translate at the polls.
Experts across the country are watching to see which party’s social media strategy paid off the most on election day.
Half of Canadians, regardless of age, use Facebook weekly to get news on current events and politics, said Oksana Kishchuk, a consultant with Abacus Data.
Social media has become a vital player in building support. It’s not just about posting either, she said, as parties have to consider good photos, snappy clips and current trends.
“Mastering these techniques will be important,” Kishchuk said.
As election day comes closer, she says all three main parties are taking the strategy of “target and spend.” In the last week or so, each has spent $400,000 to $600,000 on advertisements on Facebook and Instagram. The Liberals and NDP are using that cash to share messages focusing mainly on their own strengths, while the Conservatives have put a focus on Justin Trudeau, she said.
The most recent polling by Abacus shows Liberals in the lead with their social media strategy, Kishchuk said, but impressions of Singh and Conservative Leader Erin O’Toole rose significantly during the election.
In particular, Kishchuk said she’s interested to see the outcome of the New Democrats focus on TikTok to connect with younger voters.
“Very few (users) are using TikTok as a main source for news,” she added.
Tori Rivard says she joined the app because of Singh after seeing “a lot of hype” from the leader through her friends’ social media accounts. Now, she is excited about the party and even showed up to a campaign stop in Ontario.
“I think it’s super important especially with millennials and gen Z because social media is how we get all of our information pretty much,” Rivard said. “So (Singh) being engaged on there makes us more likely to seek out more information elsewhere.”
Tamara Small, a professor of political science at the University of Guelph, said she thinks TikTok as a campaign strategy is more of a “stunt” and will be less influential at the ballot box.
“As a tool of persuasion, it’s a bunch of people who cannot vote, and a bunch of people who, if they can vote, don’t likely vote,” she said. “So, thank goodness it’s free because you wouldn’t want to spend money there.”
Small also cautioned that social media can get party faithful excited but has less impact on flipping people’s partisanship.
“The whole thing is a big echo chamber,” she said.
“If you are going to go on social media you are unlikely to follow the leader of the party that’s ‘the worst’ because why would you do that to yourself.”
Social media is a double-edged sword for political parties, said Kim Speers, a professor at the University of Victoria. It has the potential to garner new support by sharing what the party stands for
“It also has the potential to decrease support if negative (information) is found on a current candidate’s social media account or if the messaging is or can be negatively misinterpreted,” she said.
Both the Conservatives and the New Democrats removed candidates or saw them resign because of their social media history.
All parties are taking a hybrid approach, she said, which includes social media ads, videoconferencing and in-person campaigning. She said NDP are focusing on new social media platforms, the Liberals have a more traditional approach with things like Facebook ads and the Conservatives are using a virtual approach, with online question-and-answer sessions and rallies.
The mix is important, Speers said, because when it comes to social media the parties “may have followers but they need voters more.”
This report by The Canadian Press was first published Sept. 18, 2021.
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