(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.
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