Qidian’s founder and sole principal, Bin Hao (“Hao”), held Qidian out as a “High-Tech Real Estate Investment & Financing company,” and on that premise persuaded at least 67 investors from 17 states to pour approximately $10.3 million into a fraudulent Ponzi scheme. 

From at least January 2017 to as late as 2021, Qidian and Hao offered and sold promissory notes and membership interests in various SPVs to investors, promising high annual return rates of 8% to 25%, to facilitate providing loans to a Miami-based real estate company.  Hao represented to investors that their investments were low risk and carried various guarantees, including a “project completion guarantee,” “principal guaranteed,” and “return guaranteed.” 

Hao reportedly solicited investors through pre-existing relationships within the Chinese-American community of Northern Virginia and Maryland, as well as through word-of-mouth referrals from other investors.  In total, the scheme allegedly raised money from investors across at least 17 states. 

The SEC’s Charges 

On September 28, 2023, the Securities and Exchange Commission (the “SEC”) commenced a civil action against Bin Hao and Qidian in the United States District Court for the Southern District of Florida, alleging that they fraudulently raised approximately $10.3 million through an unregistered securities offering.  The SEC’s complaint alleged that starting in January 2019, the Miami real estate company ceased making nearly all interest payments to Qidian.  Nevertheless, Hao and Qidian allegedly continued to solicit new investors, raising at least $10.3 million while misrepresenting that Qidian was using investor proceeds to invest in real estate ventures to generate “guaranteed” annual investment returns, and failing to disclose the Miami company’s deteriorating financial condition. 

The SEC complaint (accessible below) further alleges that: 

• Qidian and Hao used more than $2.3 million of new investor money to pay prior investors’ interest in a Ponzi-like fashion; 
• Hao misappropriated at least $793,267 of investor funds for his personal expenses, including cash withdrawals, credit card payments on his Chase Bank, American Express, and Citibank accounts, BMW lease payments, and mortgage payments; and 
• Defendants transferred $733,217 to three separate accounts in China, none of which are linked to known investors. 

The complaint charged Hao and Qidian with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder.  The SEC’s investigation was part of the Miami Regional Office’s Fraud Against Minority Groups Initiative.

SEC Obtains Final Judgment 

On March 5, 2026, the U.S. District Court for the Southern District of Florida entered a Final Judgment against Bin Hao.  Without admitting or denying the allegations in the complaint, Hao consented to the judgment, which includes: 

• A permanent injunction barring Hao from future violations of the federal securities laws; 
• An officer-and-director bar prohibiting him from serving as an officer or director of any public company; 
• Disgorgement of $1,526,484 in ill-gotten gains plus prejudgment interest of $475,201; and 
• A civil penalty of $236,451 — for a total payment obligation to the SEC of $2,238,136. 

The Final Judgment also includes a bankruptcy nondischargeability provision.  Under Section 523(a)(19) of the Bankruptcy Code, the amounts owed under the judgment are deemed debts arising from violations of the federal securities laws and cannot be discharged in Hao’s pending bankruptcy proceeding. 

Bankruptcy Proceedings 

Hao filed for bankruptcy protection in April 2022 in the Eastern District of Virginia.  In May 2023, the bankruptcy court denied Hao a discharge, finding that Hao failed to satisfactorily explain the loss of millions of dollars in investor funds.  The court also found that Hao had made material misstatements in his bankruptcy filings by failing to disclose cryptocurrency accounts at Coinbase and Kraken, a PayPal account, a Citizens Bank account, and a 50% ownership interest in a construction company.  In a related adversary proceeding, Hao invoked his Fifth Amendment right against self-incrimination when asked whether investor quarterly payments were being funded by new investor money, and the court drew a negative inference from that refusal. 

Scale of Alleged Losses 

In total, Qidian allegedly provided at least $26 million in funding to the Miami-based real estate company for various projects.  Hao’s own bankruptcy schedules reflect potential investor claims exceeding $41 million.  Separately, Metronomics Holdings, LLC — the primary real estate developer — listed a debt to Qidian of over $51 million in its own bankruptcy filings in the Southern District of Florida, suggesting the true scope of investor losses may be significantly larger.

Contact Us 

Investors who wish to discuss a possible claim involving Qidian, Bin Hao, or other persons, including any sales agents who may have solicited an investment, may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation.  The firm has handled numerous cases involving securities and commodities, both in state and federal court and in arbitration.  Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide.

Hedgehog advertises itself on its website and elsewhere as a private lending and investment firm, offering investors fixed returns between 12% and 20% annually.  Hedgehog represents that it is engaged in a business of lending funds to small businesses or otherwise assisting small businesses in raising capital.

On June 7th, 2025, Hedgehog disclosed on its website that it was under investigation by the Utah Division of Securities (“UDS”).  This announcement followed an Emergency Order to  Cease and Desist (“UDS Order”) issued by UDS on May 23, 2025 that discusses activities by Hedgehog and other persons, which is accessible here. SD-25-006 Order to Cease and Desist – Hedgehog et al. (1) (1)

Included among the various Hedgehog entities that appear to have offered securities to the  public are Hedgehog Holdings I, LLC (“Hedgehog I”) and Hedgehog Holdings II, LLC (“Hedgehog II”), as well as another entity known as Sunnyside Equity Holdings, LLC (“Sunnyside”).

The UDS Order alleges that Hedgehog Investments and Hedgehog I offered and sold investment opportunities in the form of promissory notes or investment contracts (“Hedgehog Notes”) to more than three hundred (300) investors and collected more than $54 million. The UDS Order alleges Hedgehog Notes purportedly pay interest between 12% and 20% for a 12- or 24-month note, depending on the amount invested, and some notes pay as high as 49% for a two-year note.  The UDS Order further alleges that “between the Hedgehog Notes and Sunnyside Notes, Respondents have fraudulently taken at least $84 million from more than 300 investors… .”

The UDS Order alleges that notes “issued by Hedgehog Investments and the Sunnyside Notes are unregistered securities.”  The UDS Order further alleges that Hedgehog I and II purport to rely on Regulation D, Rule 506(b ), a “safe harbor” under Section 4(a)(2) of the 1933 Securities Act, for an exemption from registration. Pursuant to Utah Code Ann. § 61-1-14.5, the burden of proving an exemption from registration is on the person claiming such exemption.  The UDS Order alleges that “Respondents have not provided evidence to show they meet an exemption from registration. Therefore, based upon the record developed through the [UDS’s]investigation, the Notes issued by Hedgehog Investments and the Sunnyside Notes are unregistered securities.”

The UDS Order alleges that Gilbert, Arizona-based Stronghold Wealth Partners, LLC has a “solicitor agreement” with Hedgehog Investments to refer investors, for which Stronghold Wealth receives transaction-based compensation of 3.5% of the investment principal after a referred individual invests.

While the State of Utah’s investigation does not prove that there has been any wrongdoing by Hedgehog or its affiliates or sales agents, several facts in the UDS Order are concerning including the UDS’s allegations that the subject notes constitute unregistered securities and that some of the investor funds do not appear to have been used in the manner represented to investors.  The subject notes were purportedly private placements offered under an exemption from registration often referred to as Securities and Exchange Commission “Regulation D”.

Investors who wish to discuss a possible claim involving Hedgehog or other persons, including any  sales agents who may have solicited an investment, may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation. The firm has handled numerous cases involving securities and commodities, both in state and federal court and in arbitration. Attorneys at the firm are admitted in New York, Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states when required by applicable rules).

THIS ARTICLE IS INTENDED AS ATTORNEY ADVERTISING AND IS NOT AN OFFICIAL ANNOUNCEMENT

The Financial Industry Regulatory Authority (“FINRA”), which oversees the U.S. brokerage industry, found that the brokerage failed to have an adequate supervisory system to monitor employee accounts for potential misconduct.

The wayward broker, Bruce Hammonds, has been sentenced to 57 months in federal prison for convincing 11 people to invest more than $1 million in a Ponzi scheme he ran as a Merrill branch representative in San Antonio, Texas.

Hammonds ran his scheme for 10 months out of the Merrill Lynch, Pierce, Fenner & Smith Inc unit in Texas. He has been barred since December 2009, FINRA said.

Merrill Lynch supervisors reportedly approved Hammonds’ request to open a business account as B&J Partnership, the name under which he also ran the Ponzi scheme. He told Merrill supervisors that he was funding the account through proceeds from a house-flipping business, according to the settlement.

Hammonds told investors that B&J was affiliated with Merrill and promised returns between 30 percent and 100 percent, according to the settlement. In reality, B&J was reportedly nothing more than a Ponzi scheme. A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.

Investors who believe they may have been a victim of “selling away” or a Ponzi scheme may contact the Law Office of Christopher J. Gray, P.C. for a confidential, no-cost consultation.

A clientof Edward Jones, one of the largest brokerage firms in the country with more than 12,000 brokers, reportedly brought the matter of Gibraltar Partners Inc. to the firm’s attention in March. As a result of its investigation, during which the company learned that the Justice Department was in the middle of a criminal investigation of Gibraltar Partners, Edward Jones reportedly fired the brokers.

“Selling away” is one of the most common difficulties independent and franchisee broker-dealers face in their oversight of registered reps. Such reps typically operate in one- or two-man offices and have no branch manager looking over their shoulders on a day-to-day basis. Cases typically involve a broker selling a financial product that the broker-dealer did not approve or know about, with the investment vehicle blowing up and harming the client’s portfolio.

Investors who believe they may have been a victim of “selling away” with respect to Gibraltar Partners or otherwise MAY contact the Law Office of Christopher J. Gray, P.C. for a confidential, no-cost consultation.