(Adds comment from investor Marlon Sanchez, detail on Cynk's
By Rodrigo Campos
July 11 U.S. regulators on Friday suspended
trading in Cynk Technology Corp, citing possible
market manipulation in the one-time penny stock whose market
value rocketed within weeks from less than $20 million to more
than $6 billion.
After the virtually unknown company with no assets or
revenue skyrocketed in value for no apparent reason, the
Securities and Exchange Commission and Financial Industry
Regulation Authority (FINRA) decided to pull the plug. Listing
its business address in Belize but filing out of Nevada, the
company said it intended to create a social network business.
FINRA posted a trading suspension in the stock early on
Friday using its "Extraordinary Event Halt" code. The SEC issued
its suspension shortly afterward, extending the trading hiatus
through July 24.
The SEC cited "concerns regarding the accuracy and adequacy
of information in the marketplace and potentially manipulative
transactions in Cynk's common stock."
Shares of Cynk, a development-stage company which SEC
filings said formerly went by the name Introbuzz, were hardly
ever traded, exchanging hands at pennies per share through late
May. Beginning on June 17, shares rocketed from 6 cents to as
much as $21.95 at one point on Thursday.
Based on Thursday's closing price of $13.90, its stock
market value is $4.05 billion. At its peak, the stock had a
higher market value than three dozen members of the S&P 500
including Cablevision Systems, Pitney Bowes
, Legg Mason and ADT Corp.
Identified in regulatory filings as a Nevada corporation, it
lists a business address in Belize City, Belize. Financial
statements with the SEC show no assets, no sales and no positive
cash flow. Its last quarterly report, from the third quarter of
2013, shows a net loss of $11,275 for the period.
Its website, site.introbiz.com, lists no phone number. A
form for contacting the support group warns that it could take
two days to respond.
An investor named Marlon Sanchez was listed as owning 72
percent of the 291 million outstanding shares. But he had sold
his stake, according to a June 11 letter to OTC Markets Group
Inc, operator of the OTC Pink market on which Cynk shares
The letter, signed by Las Vegas attorney Harold Gewerter,
described Javier Romero, a resident of Belize, as the "sole
officer and director" of Cynk.
The document, posted on an OTC website, said Romero has
owned 210 million shares, roughly 72 percent of outstanding
shares, since Feb. 20, 2014, "which he purchased from the former
sole officer and director" - Sanchez.
Sanchez, reached by telephone on Friday, said: "I left the
company in February and I have no further comment."
Two SEC filings dated in March and April continue to
identify Sanchez as the company's president and chief executive
Sanchez also disclosed in an April 2013 filing to the SEC
for Introbuzz that he graduated from San Diego State University
with a degree in Business Administration Marketing. An alumni
official said Sanchez was not in the university's alumni data
Calls to the phone number on file at the SEC reached an
automated recording saying: "You have reached an unassigned
The Belize address on file is The Matalon, Coney Drive,
Suite 400 in Belize City. The building's front desk receptionist
said the building has no suite 400 and building managers have
never been approached to rent space to Cynk.
Regus, the company that rents out space in the business
center in Las Vegas where Cynk had its offices, said a company
named Introbuzz had offices there through the end of June but no
longer operates in the building. They would not elaborate on how
long Introbuzz had the offices, or why the company left.
The attorney, Gewerter, responded to Reuters with an email
saying he no longer represents the company.
OTC Markets did not immediately return a call for comment.
Before June 17, Cynk shares had traded only on three days in
2014, with daily volume not exceeding 2,000 shares. Trades had
occurred at either 8 cents a share or 6 cents, its closing price
on May 15, when it last recorded trades before mid-June.
Then, activity in the stock exploded.
Volume on June 17 topped 367,000 shares and the price shot
to as high as $4.25, before closing the day at $2.25. Trading on
every day since then averaged 120,533 shares. The price soared.
The frenzy culminated on Thursday with a record volume of
386,060. The share price spiked as high as $21.95 before closing
at $13.90, down from Wednesday's close of $14.71.
The SEC suspension is valid through July 24, but no
quotation may be entered after that date unless brokers and
dealers have complied with all rule provisions, the SEC said in
a statement, which could effectively extend the suspension.
There were no records immediately available identifying the
owners of the Cynk shares that do not belong to Romero, or what
their eventual losses could be.
The SEC has suspended trading in more than 1,300 micro-cap
stocks since May 2012, said Eric Bustillo, regional director of
the SEC's Miami Regional Office, who declined to comment
specifically on the Cynk suspension.
(Additional reporting by Chuck Mikolajczak in New York,
Alexandra Alper in Mexico City, Sarah N. Lynch in Washington
D.C., Mike McDonald in Guatemala and Jose Sanchez in Belize
City; Editing by Bernadette Baum, Dan Burns and David Gregorio)