Alleged Multi-Million Dollar Fraud Scheme Uncovered Involving NASDAQ-Listed Company
ALEXANDRIA, VA – Federal authorities have announced charges against Lai Kui Sen, co-CEO of OST, and yan Zhao, a financial advisor operating under multiple aliases, in connection with a complex securities fraud scheme that allegedly defrauded investors of significant sums. The case highlights the Department of Justice’s commitment to prosecuting financial crimes, particularly those involving foreign actors.
According to an indictment unsealed today, Sen and zhao orchestrated a plan to artificially inflate the stock price of OST, a Cayman Islands-based company publicly traded on NASDAQ, which claimed to manufacture display modules. The scheme involved distributing heavily discounted – and in certain specific cases, free – OST shares to a group of fifteen co-conspirators. These shares, totaling over 70 million in one transaction, were acquired without payment to OST.
On April 15, 2025, coinciding with the distribution of these discounted shares, a coordinated effort began to manipulate the market. This included deceptive promotional activities, such as impersonating legitimate investment advisors and creating a false impression of widespread investor interest through social media campaigns.
Zhao and sen then allegedly facilitated the sale of these artificially obtained shares, generating profits exceeding $110 million. This profit came at the expense of unsuspecting investors who were lured into purchasing OST stock at inflated prices. The scheme ultimately collapsed on June 26, 2025, resulting in a catastrophic loss of over $950 million in market capitalization for OST - a staggering 94% decline in value.
“The Department of Justice will vigorously pursue those who attempt to undermine the integrity of our financial markets,” stated officials.”We encourage anyone with information regarding misconduct or criminal behavior to come forward. Failing to do so carries serious consequences.”
Jose A. Perez, Assistant Director of the FBI’s Criminal Investigative Division, emphasized the FBI’s dedication to combating financial crime. “Securities fraud by foreign actors not only violates fair investment practices but also harms American investors and the stability of U.S. markets,” he said.
kevin Muhlendorf, Inspector General of the SEC, added, ”The SEC-OIG is committed to relentlessly investigating false filings and protecting investors, global markets, and the integrity of SEC operations.”
Both Sen and Zhao face charges of conspiracy to commit securities and wire fraud, securities fraud, and wire fraud. If convicted, they could each face up to 20 years in prison for conspiracy and wire fraud, 25 years for Title 18 securities fraud, and another 20 years for Title 15 securities fraud.Sentencing will be determined by a federal judge based on U.S. Sentencing Guidelines and other relevant factors.
The investigation was conducted by the FBI and SEC-OIG, with assistance from FINRA’s Surveillance and Market Intelligence – Market Abuse Group, who initially referred the matter.The case is being prosecuted by Trial Attorney Kashan K. Pathan of the Department of Justice’s Fraud section and Assistant U.S. Attorney Avi Panth for the Eastern District of Virginia.
Individuals who believe they may have been victims of this scheme are encouraged to visit https://www.justice.gov/criminal/criminal-vns/case/united-states-v-yan-zhao-and-lai-kui-sen for further information.
It is indeed critically important to remember that an indictment represents an accusation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
