New Jersey Attorney General Jennifer Davenport announced on June 4th that the Securities Bureau under the New Jersey Division of Consumer Affairs has filed a civil lawsuit against Hu Xiao, also known as Mark Hu, a former resident of Princeton. The lawsuit alleges that he illegally raised over $2.5 million from investors through two companies and misappropriated some of the funds for personal expenses.
According to the complaint, Hu Xiao sold unregistered securities to at least 15 investors through Skyline Technology USA LLC and Thunderbirds.ME, Inc., including company stocks, fixed return investment plans, and artificial intelligence-related investment projects.
The prosecution alleges that Hu Xiao commingled investment funds with personal accounts and misappropriated at least $280,000 to purchase a Florida residence, tropical vacations, and to pay for his children’s tuition at private schools and universities.
Investigations revealed that Hu Xiao primarily recruited investors through WeChat, promoting investment opportunities in various WeChat groups. He also held informational sessions at the Princeton public library and online to raise funds from friends, former colleagues, and community members.
The complaint states that Hu Xiao often claimed to hold a Ph.D. in computer science from Columbia University to enhance credibility, although the university has no records of his enrollment or degree. He also promised investors annual returns of 10% to 22% and used titles such as “co-founder,” “managing partner,” and “chief operating officer” as incentives for investment. However, these titles did not grant investors any actual management authority or the right to access the company’s financial information.
Some investors said they decided to invest after meeting Hu Xiao at community events, through friend referrals, or in WeChat groups. Hu Xiao claimed the company was valued at $10 million and urged investment by saying, “If you don’t invest now, the stock price will rise later.” When some investors requested information about the company’s operations and financial condition after investing, they were told that “minor shareholders do not have the right to know.”
Furthermore, it was found that Hu Xiao previously attracted investments with projects such as AI cryptocurrency trading robots, claiming to utilize AI systems for automatic trading on multiple cryptocurrency exchanges with guaranteed returns. Investigations suggest that the principal and interest of some early investors may have come from funds of subsequent investors rather than actual investment returns.
Acting Director Keith A. Alt of the Securities Bureau specifically advises that financial fraudsters often target acquaintances, colleagues, or community members to quickly build trust based on existing relationships. He urged investors to verify whether investment products and salespersons are registered in accordance with the law before investing and to request complete written financial information, not just relying on friend recommendations, WeChat messages, or personal anecdotal stories to make investment decisions.
This civil lawsuit accuses Hu Xiao and his companies of violating the New Jersey Uniform Securities Law, including selling unregistered securities, making false statements, and concealing important information. The state government is seeking a court order to prohibit him from engaging in securities-related business, recover investor losses, confiscate illegal gains, and impose civil penalties.
Additionally, Hu Xiao was indicted in February by a New Jersey grand jury on criminal charges including securities fraud, fraudulent theft, money laundering, and corporate misconduct. The related case is currently under trial.