UPDATE 1-U.S. SEC charges man they say is behind the CYNK Technology fraud

Fri Jul 31, 2015 5:37pm EDT
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(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, 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.   Continued...