U.S. SEC charges man they say is behind the CYNK Technology fraud (updated)

CYNK Technology

31/07/2015 22:37

(Updates with details about the case, background on CYNK and 
prior arrest of another suspect) 
    By Sarah N. Lynch 
    WASHINGTON, July 31 (Reuters) - The U.S. Securities and 
Exchange Commission filed civil fraud charges on Friday against 
a man they say is behind a pump-and-dump scam involving CYNK 
Technology  CYNK.PK , a penny stock company that briefly rose to 
a $6 billion value despite having no revenue. 
    The SEC said that Phillip Thomas Kueber, 54, filed a false 
and misleading registration statement for the company, and then 
enlisted a small group of "straw" shareholders and "sham CEOs" 
to conceal his control of the company's non-restricted shares. 
    In truth, the SEC said these shareholders were actually his 
family members and the shares were really transferred to 
brokerage accounts and offshore shell companies he controlled. 
    The SEC added that Kueber failed in his attempts to cash in 
the stock, however, after the SEC suspended trading in CYNK on 
July 11, 2014, amid the suspicious trading activity. 
    The SEC said Kueber is a Canadian citizen, and sometimes 
goes by the names Phil Thomas, Philip Thomas and Philip Keeber. 
    Reuters could not immediately locate a telephone number for 
a Phillip Thomas Kueber in Canada. Kueber does not have any 
known defense counsel.  
    Penny stock companies are often hijacked by fraudsters who 
seek to pump up the stock with phony press releases so they can 
quickly dump it before the price plummets. 
    CYNK grabbed headlines last year because its value 
skyrocketed despite having no revenue and being listed as a 
"development stage" company. 
    At one point during the stock's rally, shares rose more than 
20,000 percent in a matter of weeks, hitting an intraday high of 
$21.95 on July 10, 2014.  
    This marks the second person the SEC has charged in 
connection with the alleged CYNK fraud. 
    In June, Gregg Mulholland was arrested and charged with 
securities fraud and money laundering conspiracies in connection 
with CYNK and other public companies.  
    At that time, the SEC also filed parallel civil charges 
against Mulholland. 
     
     
 
 (Reporting by Sarah N. Lynch; Editing by Sandra Maler and Eric 
Beech) 
 ((sarah.n.lynch@thomsonreuters.com; 202-354-5831;)) 
 
Keywords: SEC CYNK/FRAUD