Securities and Exchange Commission filed suit against China Infrastructure Investment Corp. and several individual defendants on March 3, 2015, mostly for securities fraud. After filing an answer through counsel, the defendants claimed that they require hiring a new attorney, then became unresponsive.
Finding that the defendants have violated every court order since September 17, 2015, the court entered a default judgment. The defendants are enjoined from violating any further securities regulation, and the individual defendants are enjoined from serving as officers or directors of publicly traded companies. The defendants were also assessed $2.1 million in civil penalties.
Unfortunately, this is not an uncommon scenario--an Asian party simply ignores the U.S. court and essentially chooses to deal with the default judgment, because it deems the cost-benefit calculus to be in its favor. What is a bit surprising is that a party would engage in this tactic with the S.E.C., which essentially controls its ability to conduct business in the United States.