SEC v. Guosheng Qi

Guosheng Qi and Gridsum are named in an SEC case charging that Qi and Gridsum allegedly defrauded investors through their misuse and unreported use of funds raised in a 2016 U.S. initial public offering, as well as their failure to disclose millions of dollars in related-party transactions that benefitted Qi’s family members, according to the SEC. The SEC alleges that Gridsum and Qi falsely stated in Gridsum’s 2016, 2017, and 2018 annual reports that no IPO proceeds were used to pay officers or directors of the company, or their associates. The SEC alleges that instead, Gridsum’s officers, directors, and associates received approximately $3.8 million of IPO proceeds that were paid from U.S. bank accounts that Qi controlled, including approximately $2.5 million that were directed to Qi’s wife. The Complaint also alleges that between September 2016 and June 2020, Gridsum and Qi directed a series of undisclosed payments to Qi’s wife and mother-in-law for supposed consulting contracts between Gridsum and a company controlled by Qi’s family members. The Complaint alleges that the total value of these related party transactions equaled $7.1 million, of which Qi and his family directly or indirectly received at least $5.2 million.

Summary generated from official Securities and Exchange Commission press release