HF Foods Group (HFFG) Announces Settlement with SEC

HF Foods Group Inc. (NASDAQ: HFFG) (“HF Foods”, or the “Company”), a leading food distributor to Asian restaurants across the United States, today announced the final resolution of the previously disclosed formal, non-public investigation by the staff of the U.S. Securities and Exchange Commission (“SEC” or “Commission”) into allegations that the Company and/or its former executives violated United States securities laws.

As part of the settlement, the Company neither admitted nor denied the SEC’s findings. The Company has consented to the entry of an administrative civil cease-and-desist order by the SEC (the “Order”) with respect to violations of Sections 17(a) of the Securities Act of 1933, and of Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B), and 14(a) of the Securities Exchange Act of 1934, as amended, and Rules 10b-5, 12b-20, 13a-1, 13a-11, 13a-13, 13a-15(a), and 14a-9 thereunder, resulting from the materially false and misleading disclosures and other fraudulent conduct carried out by its former Chairman and CEO Zhou Min Ni and former CFO Jian Ming “Jonathan” Ni. The Company agreed to payment of a civil monetary penalty of $3.9 million.

The Order states that, in determining to accept the Company’s Offer of Settlement, the SEC considered the numerous remedial actions promptly undertaken by the Company and its cooperation during the investigation. The Company’s resolution follows charges brought by the SEC against the two former executives in a District Court action filed on June 3, 2024. As a result of the SEC’s district court complaint against them, the two former executives agreed to pay civil fines and disgorgement, and agreed to be subject to officer and director bars. Zhou Min Ni also agreed to a conduct-based injunction which enjoins him from directly or indirectly participating in the management of, or otherwise exercising any control or influence over the Company. A Special Litigation Committee of the Board of Directors previously obtained a monetary settlement from the former executives that was ratified by the Delaware Chancery Court.

Peter Zhang, Chief Executive Officer of HF Foods, said: “HF Foods is pleased to put this matter relating to the conduct of the Company’s former executives behind us. We are now focused on expanding the business and operating the Company in a manner that is ethical and consistent with the principles and values that are so important to the Company’s future success.”

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