SEC acts to halt offering

The Securities and Exchange Commission said Friday that it filed an emergency action to halt an ongoing $45-million securities offering that the agency alleged to be a Ponzi-like scheme by an Arcadia man.

The complaint was filed against Terchi Liao (a.k.a. Nelson Liao) and two entities he controls, AOB Commerce Inc. and AOB Asia Fund I, LLC.

The SEC said a federal judge issued a temporary restraining order halting the offering and appointed a temporary receiver over the AOB entities.

Liao, 49, and the AOB entities have raised more than $45 million from hundreds of investors nationwide since mid-2004 through the unregistered offering and sale of promissory notes that purportedly pay guaranteed interest of as much as 5.5% a month, the SEC alleged.

Liao represented to investors that his companies were in the business of making loans to companies in Asia, but “they have principally used investor funds to pay the interest on the promissory notes they previously issued and to pay commissions to investors who solicit others to invest in the notes,” the SEC said.

Liao’s attorney, Russell Frandsen, said AOB had been “cooperating fully with the SEC.” He said the company “believes it was in full compliance with the law.”