SEC accuses 2 California men of running Ponzi scheme

The Securities and Exchange Commission sued two California men, saying they ran an $80-million Ponzi scheme promising Korean American investors annual returns of as much as 36% in foreign-currency trading.

Peter Son and Jin K. Chung had about 500 investors in the United States, South Korea and Taiwan, the SEC said Tuesday. Funds were used to pay some investors and expenses including mortgage payments on Son’s multimillion-dollar home, the agency said. The regulator is seeking to freeze their assets.

Son, of Danville, and Chung, who lives in Los Altos, ran their investment program through SNC Asset Management Inc. and SNC Investments Inc., the SEC said in a suit filed at federal court in San Francisco.

They promised investors returns of as much as 36% and said SNC Asset Management made profits of 50% from trading each year since 2003.

The two men provided “monthly account statements showing fictitious returns,” the SEC said. They “drained” the companies’ bank accounts as the scheme collapsed and transferred funds to overseas accounts.

Investor money also was used to pay Son’s wife a salary for which she did no work, the SEC said.

The Commodity Futures Trading Commission said Tuesday that it filed a related suit at federal court in San Francisco.