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SEC Finds Activist Investor Li Didn't Disclose Key Facts On Holdings Of Sinovac

Sinovac Biotech Ltd. (SVA), a provider of biopharmaceutical products in China, said that the United States Securities and Exchange Commission charged activist investor, Jiaqiang "Chiang" Li and his firm 1Globe Capital LLC based on their failure to disclose the full amount of Sinovac shares they beneficially owned and their participation in an activist plan to replace the majority of Sinovac's Board of Directors.

The SEC order found that Li and 1Globe violated United States federal securities laws and SEC rules requiring individuals or entities whose total ownership of a company's stock exceeds certain thresholds to disclose their ownership, intention to acquire additional shares, and plans regarding changes in company management or control.

Li and 1Globe agreed to the entry of the SEC's order without admitting or denying the SEC's findings of violations and agreed to pay civil penalties totaling $290,000.

According to Sinovac, the SEC's findings align with both the factual findings of Sinovac's Board in triggering the company's Rights Agreement and with previous findings by the High Court of Justice of Antigua and Barbuda, where Sinovac and 1Globe are engaged in ongoing litigation.

The SEC found that Li and 1Globe participated in an activist plan to replace four of five incumbent directors through a shareholder vote at Sinovac's 2018 annual shareholder meeting in Beijing but failed to disclose material information.

Sinovac stated that the SEC decision highlighted how Li and 1Globe's illegal and improper actions negatively impacted Sinovac's shareholders and reaffirms factual determinations made by the current rightfully elected directors of Sinovac.

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