The SEC has halted trading on that $6B fake social media stock
Following a week of unprecedented stock market gains and calls from Pando and countless other for SEC investigations into stock fraud, financial regulators finally stepped in today to halt the trading of development stage OTC Markets company CYNK Technology Corp.
As we reported yesterday, the stock had climbed more than 35,000 percent in 17 days reaching a market cap of more than $6 billion, despite having no operations, no assets, no employees, and no real reason for existing. It was obvious from anyone who bothered to pay attention that things smelled incredibly fishy.
The stock was subject to what's called a "U3 extraordinary event halt," which the OTC describes as:
Trading is halted because FINRA has determined that an extraordinary event has occurred or is ongoing that has had a material effect on the market for the OTC Equity Security or the security underlying an OTC ADR or has caused or has the potential to cause major disruption to the marketplace or significant uncertainty in the settlement and clearance process.The suspension will be in place until at least 14 days (until July 24), as the SEC and FINRA investigate "concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in CYNK's common stock."
The OTC is among the least-regulated of the US public markets and often features companies that do not file regular financial disclosures – something that became true of CYNK in April of this year. Despite relatively modest volume, CYNK's stock price rose as high as $21.95 per share in inter-day trading yesterday (representing a theoretical $6.39 billion market cap), before falling to $13.90 at market close.
It was just a month ago on Monday, June 16 that CYNK opened trading at just $0.06 per share. It's likely worth much less than that now.
***Read the full statement from the SEC below:
SECURITIES EXCHANGE ACT OF 1934 Release No. 72594 / July 11, 2014
The U.S. Securities and Exchange Commission announced the temporary suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934 (the “Exchange Act”), of trading of the securities of Cynk Technology Corp. (“CYNK”), of Belize City, Belize at 9:30 a.m. EDT on July 11, 2014, and terminating at 11:59 p.m. EDT on July 24, 2014.
The Commission temporarily suspended trading in the securities of CYNK because of concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in CYNK’s common stock.
The Commission cautions brokers, dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the company.
Further, brokers and dealers should be alert to the fact that, pursuant to Rule 15c2-11 under the Exchange Act, at the termination of the trading suspension, no quotation may be entered unless and until they have strictly complied with all of the provisions of the rule.
If any broker or dealer has any questions as to whether or not he has complied with the rule, he should not enter any quotation but immediately contact the staff in the Division of Trading and Markets, Office of Interpretation and Guidance, at (202) 551-5777.
If any broker or dealer is uncertain as to what is required by Rule 15c2-11, he should refrain from entering quotations relating to CYNK’s securities until such time as he has familiarized himself with the rule and is certain that all of its provisions have been met.
If any broker or dealer enters any quotation that is in violation of the rule, the Commission will consider the need for prompt enforcement action.
If any broker, dealer or other person has any information that may relate to this matter, they should immediately contact Michael D. Paley, Assistant Regional Director, New York Regional Office at (212) 336-0145, or Elisha L. Frank, Assistant Regional Director, Miami Regional Office at (305) 982-6392.