SEC Charges Phillip Kueber – Going Public Attorneys
On July 31, 2015, the Securities and Exchange Commission (the “SEC”) announced it had charged Phillip Kueber, Canadian citizen with conducting a scheme to conceal his control and ownership of penny stock, Cynk Technology Corp. On July 11, 2014, the SEC suspended trading in the stock, Cynk Technology Corp., rose to more than $21 from less than 10 cents per share. According to its SEC filings, CYNK’s assets never exceeded $1,400.
The SEC alleges that Kueber was behind a false and misleading registration statement filed by Cynk and enlisted a small group of straw shareholders and sham CEOs to conceal his control of purportedly non-restricted shares in Cynk stock. The complaint alleges that the straw shareholders – mainly Kuber’s family members and associates in British Columbia and California – never received the shares they “purchased.” Phillip Kueber allegedly transferred the shares to brokerage accounts at Clear Water Securities, Inc. using offshore shell companies he secretly controlled and misled broker-dealers about his ownership of the shares to create the false appearance of a credible company with legitimate shareholders.
According to the SEC’s complaint filed in U.S. District Court for the Eastern District of New York, Kueber was unable to cash in on selling his Cynk shares when the SEC suspended trading in Cynk amid suspicious activity surrounding the company’s stock. Once trading resumed, the share price dropped to 60 cents per share on July 28, 2014.
“We allege that Kueber used straw shareholders, offshore dummy corporations, and puppet corporate officers to gain and conceal control over the majority of Cynk shares,” said Michael Paley, Co-Chair of the SEC Enforcement Division’s Microcap Fraud Task Force. “Law enforcement has again pierced through the layers of deceit to hold an alleged wrongdoer accountable, in this case before he could liquidate his shares in the open market and realize ill-gotten profits.”
The SEC’s complaint alleges that Kueber violated the antifraud provisions of federal securities laws and related SEC antifraud rules. The SEC is seeking to impose a civil monetary penalty, officer-director and penny stock bars against Kueber, and a court-ordered injunction against future antifraud violations.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, or [email protected]. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities & Going Public Lawyers
Brenda Hamilton, Securities Attorney
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