Court Enters Final Judgment in Microcap Fraud Case Involving Shares of Cynk Technology Corp.
Litigation Release No. 24325 / October 26, 2018
Securities and Exchange Commission v. Philip Thomas Kueber, No. 15-cv-04479 (E.D.N.Y.)
On October 10, 2018, a U.S. District Court for the Eastern District of New York entered a final judgment on consent against Philip Kueber, who was charged with orchestrating a fraudulent investment scheme using microcap issuer Cynk Technology Corp.
The SEC's complaint, filed July 31, 2015, alleged that Kueber concealed his control of Cynk and its purportedly non-restricted shares through nominees and straw shareholders. Although Cynk's stock surged on July 10, 2014 to a high of more than $21 per share (despite having no assets or operations), Kueber was thwarted from profiting from his scheme when the Commission's July 11, 2014 Order suspended trading in the securities of Cynk. Kueber was also charged criminally for related misconduct. In the criminal case, Kueber pleaded guilty, forfeited $1.2 million, and was sentenced to three years of supervised release.
The final consent judgment against Kueber imposes permanent injunctions against violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, which are antifraud provisions of the federal securities laws. The judgment also imposes a permanent officer and director bar and a permanent bar from participating in an offering of penny stock.
The SEC appreciates the assistance of the U.S. Attorney's Office for the Eastern District of New York, the Federal Bureau of Investigation, the Internal Revenue Service, the Department of Homeland Security, and Financial Industry Regulatory Authority.