Founder of L&L Energy, Inc. Resigns After SEC Fraud Charges

Securities And Exchange Commission SECBy U.S. Government [Public domain], via Wikimedia Commons

If you listen to the SEC’s complaint against him, Dickson V. Lee, chief executive officer and chairman of the board of directors of L & L Energy, Inc. (NASDAQ:LLEN), is a control freak.

“Misrepresented” that he hired CFO

However, just days after being charged by the SEC that he had “fraudulently misrepresented” that he had hired top talent to manage the firm he founded, he resigned.

On March 27, 2014 the SEC filed a complaint against Lee, whose company is headquartered in Seattle but operates a coal operation in China. Then in an SEC document filed on April 1, Lee announced his retirement.

The SEC claimed that their action against Lee “arises out of a fraudulent scheme by L & L Energy, Inc. (NASDAQ:LLEN) and Dickson Lee to create the appearance that L&L was run by a professional management team and conceal Lee’s single-handed control of the company,” the complaint says. “From approximately August 2008 to June 2009, L&L and Lee repeatedly and fraudulently misrepresented to the public that it had certain persons serving in critical executive management roles at the company when, in reality, those persons served in no such roles.”

CFO claims not to have signed documents

The SEC document states that Lee boasted to shareholders that he had hired a top chief financial officer at a time when the CFO had e-mailed him declining the job.  When filing official documents with the SEC, the documents were digitally signed by the CFO, but no such signature occurred, the SEC alleges.  When the then-CFO confronted Lee, he admitted his transgression.  The acting CFO then declined to take the position of full time CFO but Lee continued his scheme regardless.  The goal Lee was pursuing was a strategy that would help the firm raise additional assets from investors.

Lee is required to answer the charges near the end of April.



About the Author

Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing a trading program’s strategy and mapping it to a market environment and performance driver. He provides analysis of managed futures investment performance and commentary regarding related managed futures market environment. A portfolio and industry consultant, he was an adjunct instructor in managed futures at Northwestern University / Chicago and has written or edited three books, including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008). Mark was director of the managed futures division at Alaron Trading until they were acquired by Peregrine Financial Group in 2009, where he was a registered associated person (National Futures Association NFA ID#: 0348336). Mark has also worked as a Commodity Trading Advisor himself, trading a short volatility options portfolio across the yield curve, and was an independent consultant to various broker dealers and futures exchanges, including OneChicago, the single stock futures exchange, and the Chicago Board of Trade. He is also Editor, Opalesque Futures Intelligence and Editor, Opalesque Futures Strategies. - Contact: Mmelin(at)valuewalk.com