Canadian man pleads guilty over $300 million penny stock fraud

Thu Sep 24, 2015 10:47am EDT
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NEW YORK (Reuters) - A Canadian man charged in connection with a $300 million penny-stock manipulation fraud that prosecutors say drove the market value of little-known Cynk Technology Corp past $6 billion pleaded guilty on Thursday to two conspiracy charges.

Philip Kueber, 54, pleaded guilty in federal court in Brooklyn to charges he conspired to commit securities fraud and money laundering.

He was the first of nine defendants to admit wrongdoing in connection with the scheme.

"I knew what we did was against the law, and I accept responsibility for my actions," he said at a hearing.

Kueber also agreed to forfeit $1.2 million as part of a plea agreement. He will be sentenced on Jan. 7, 2016.

His lawyer, Stanley Greenberg, declined to comment after the hearing.

U.S. regulators in July 2014 suspended trading in Cynk, a social media company with no revenue or assets, after its share price soared without explanation to $21.95 from 6 cents in less than a month.

That surge followed a month when no Cynk shares were traded at all, and briefly gave the company a market value higher than three dozen companies in the Standard & Poor's 500.

Kueber, who authorities say has also lived in California and Belize, a Central American country, surrendered in August. His surrender came a month after being indicted over his alleged role in a scheme run by a group controlled by Gregg Mulholland, a U.S.-Canadian citizen arrested in June.   Continued...