SEC Wins $5.4M Judgment Against NanoBit Over WhatsApp Scam

The court ordered NanoBit Limited to disgorge $532,649. The company also must pay $81,957 in prejudgment interest and a $1,182,251 civil penalty. Three other entities – Zhao Deli, Sweet Karma and Radiant Horizons – each received the same $1,182,251 penalty. The same order also applied to disgorgement and interest demands similar to NanoBit's.

Two individuals were also hit with penalties. Jiajie Liu must pay $60,603 in disgorgement, $9,485 in interest, and a $50,000 fine. Hua Zhao was ordered to return $4,500 in disgorgement and $704 in interest, plus a $50,000 penalty. All defendants are permanently barred from violating antifraud provisions under Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934.

Gurbir Grewal, then the SEC's Director of Enforcement, said when the charges were first announced that "relationship investment scams are a growing risk to retail investors." The SEC's Office of Investor Education advises investors to verify credentials on Investor.gov and not to rely on social media group chats for investment decisions.

Todd Brody and Jeremy Brandt of the SEC's New York Regional Office litigated the case with assistance from the Division of Enforcement's Cyber and Emerging Technologies Unit.