Danny Pang's arrest in US could be bad news for investors in Taiwan


Danny Pang, founder and ex-chief executive of PEMGroup, will make his first court appearance in California today on charges related to cash transactions. Pang was arrested yesterday in California and his assets were frozen. The U.S. case could have a major impact in Taiwan, where Pang raised most of the money.

Taiwan estimates the PEMGroup sold securities to 16,000 Taiwanese investors distributed through at least six banks in Taiwan, according to reports in the Wall Street Journal today. Sean Chan, chairman of Taiwan's Financial Supervisory Commission, told the Journal that investors paid a total of about $700 million for these securities. The SEC, in a separate move from yesterday's arrest, secured an emergency court order freezing assets controlled by Pang and his two companies related to this possible fraud of Asia-based investors.