Hall of Shame
China North East Petroleum Holdings (CNEP US)
The SEC alleged that CNEP, Wang, Ju and Jiang Chao diverted offering proceeds to the personal accounts of corporate insiders and their immediate family members, and also engaged in fraudulent conduct in connection with at least 176 other undisclosed related-party transactions.
The SEC alleged that, in connection with its two public stock offerings in late 2009, CNEP falsely stated that the offering proceeds would be used to fund future business expansion and for general working capital purposes. Instead, Jiang Chao then diverted over US$900,000 of offering proceeds to his father, Jiang Mingfu, and at the direction of Ju, diverted at least US$6m dollars to her and Sun, who is her daughter-in-law and Wang's wife.
The SEC alleged that during 2009, CNEP, Wang and Ju engaged in at least 176 undisclosed, related-party transactions. This fraudulent conduct involved US$28m in transactions from CNEP to Wang or Ju; approximately US$11m apparently loaned to CNEP or paid to third parties on behalf of CNEP by Wang or Ju; and US$20m of unusual post-year-end adjustments that appeared to eliminate the remaining debts owed by Wang and Ju to CNEP. Together, these transactions totalled about $59m of related-party activity during 2009.
In November 2012, the SEC filed fraud and other related charges against CNEP. The case initially ended in a mistrial; however, in 2015, the case against CNEP was revived.
 SEC: Securities and Exchange Commission v. China North East Petroleum Holdings Limited, et al., Civil Action No. 12-CV-8696, 30 Nov 2012
 Bloomberg: China North East Petroleum Executive’s Case Ends in Mistrial, 29 Apr 2014
 The Race to the Bottom: Acticon AG v. China North East Petroleum Holdings Limited, 30 Nov 2015
North East Petroleum: Annual Report 2010