13 Jul CYNK the aftermath – putting together more pieces to the puzzle
Back on June 10, 2013 we wrote a detailed report about a company called Introbuzz (IBZZ) which was in the process of changing its name to Cynk Technology Group (CYNK) and doing a large forward split. What intrigued us the most about the ticker besides the obvious future pump & dump set-up was the involvement of the Kueber family. Phil Kueber has a long history of working with tickers that have turned into prolific pump & dump schemes. That report can be view here.
At the time we fully expected CYNK to become a major paid promotion and added it to our watch list for a future paid promotion following it daily for new filings or market activity.
The Market Activity
Following the 75:1 forward split which reset the share price to $1.00 in July of 2013, CYNK was very slowly taken down in price to $.06/share on very light sporadic volume stretched out over months. On most days CYNK didn't even trade. The highest trading volume CYNK even had in one day was around 25,000 shares traded. Then on June 17, 2014 the volume suddenly picked up and instead of the price slowly being taken down the price was moving up. We spotted the volume when CYNK hit $.20/share. Despite the large float, Level 2 looked favorable for the share price to continue to rise. Insiders were obviously holding their shares tightly and letting the price climb, and climb it did moving all the way to $4.25/share that day.
In our opinion, very early on insiders may have been trading shares back and forth among themselves to help manipulate the price up (wash trading) which is what drew in the interest of the public. As the price rose interest grew among the social media world and in online chat rooms devoted to day trading.
For the next several days we would often see CYNK dip back into the $2 range, but any time it got close to $2.10/share a huge bid would go up which prevented the price from going any lower. The result was several nice bounces from the mid to low $2 range back into the $4s+ offering some nice profits for traders that recognized the pattern.
Even though the float for CYNK was very big, CYNK was a fresh ticker with very little past market activity. This is an indication that most if not all of the public float was controlled by insiders. Those insiders let very few shares hit the market keeping the retail float very small making it easier for them to control the share price.
On June 30, 2014 CYNK broke out to new highs hitting $6.75/share became obvious that something extra special was going on with CYNK.
The retail float wasn't growing very much (if at all) and intentionally or unintentionally, this caused significant problems for traders that were holding a short position in CYNK. From July 1 - July 3 a limited number of short shares were available for people that recognized CYNK for what it was (a grossly over valued ticker especially after the recent spike up to $6.75/share).
(image courtesy of seeking alpha author Paulo Santos from this report)
Those traders were probably licking their chops at the potential profits they might see when the CYNK share price collapsed back to where it belonged. Instead what ensued was a short trap. What the insiders basically did was allow only a few shares to hit the market available for shorting. Once a bear took the bait and shorted the stock, the insiders cut off the shares not allowing them to cover. As the shorts tripped over one another trying to cover their position the stock went crazy as brokers forced people to cover due to margin calls. But again, no shares were available for them to cover their short position. On July 9th and 10th the CYNK share price shot up topping off at $21.95/share for a potential 10,000% profit from our alert to our members and up to 36,000% for anybody that jumped in at as low as $.06/share before that. Basically the market manipulation spread like wild fire and the stock took on a life of its own.
It is possible that on July 10th after hitting $21.95 that the temptation for insiders to start selling more shares into the market was too much to resist and that combined with the slue of negative articles and negative publicity caused the price to start to fall apart closing at $13.90/share on the day.
On July 11, 2014, FINRA halted the stock in the pre market which was followed up by a formal SEC suspension at the market open because of "concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in common stock"
Our checklist of how a penny stock insider enrichment scheme works
1) Form a business entity with a forward looking business plan using some nominee CEO
2) Locate a dirty attorney to provide the legal opinion for the future insider enrichment scheme and a dirty accountant to provide the accounting services
3) Submit an S-1 filing with a bogus business plan to the SEC registering some shares for sale to a hand picked group of nominees usually for around $.01/share.
4) After obtaining public company status from the SEC, focus on how insiders can dump their S-1 shares into the public market for huge profits.
5) Set-up anonymous offshore accounts in corporate egos to hold your free trading stock.
6) Deposit shares with a dirty offshore broker who will clear certificates using its house account so they can be easily dumped into the market.
7) Do a name change/merger/acquisition of some sort to coincide with a large forward split so you can build the investor relations campaign (See Number 9 Below) around the corporate changes and at the same time increase the shares held by the insiders.
8) Have the shady attorney send in an application for the name change/forward split with FINRA. Thanks to the large forward split insiders now own tens of millions of free trading stock that cost them fractions of a penny to acquire.
9) Find a stock tout with a quality list to do a pump & paid promotion/or other form of market manipulation
10) And finally dump the super cheap free trading shares into the market earning huge profits while investors suffer losses.
In the case of CYNK it is our belief that it may have worked something like this:
1) IntroBuzz is formed as a Nevada business entity on April 30, 2008. The shell isn't used for anything for a very long time, but then the anonymous insider that really set the entity up decides to initiate an plan to make lots of money using the shell. One key individual, Phil Kueber, catches our attention for his involvement with the shell. Phil Kueber can be linked to several past pump&dump schemes.
2) An S-1 filing is done on January 20, 2012 using attorney Harold P Gewerter to provide the legal opinion and accountant Peter Messineo to provide the accounting services to help take the shell public. The S-1 is used to register up to 2,000,000 shares for sale to some hand picked anonymous insiders at $.05/share.
3) Despite only a forward looking business plan and a suspicious set-up, the SEC approved the S-1 filing on June 1, 2012.
4) 1,086,000 of those 2,000,000 registered S-1 shares ended up getting sold to some anonymous insiders at $.05/share.
5) We believe that Robert Banfield (aka Robert Bandfield) and Andrew Godfrey may have been used to help set up the nominee offshore accounts to hold those free trading shares for the CYNK insiders through a business owned by him and Andrew Godfrey called IPC Corporate Services Inc. IPC Corporate Services Inc is located in the same building as the CYNK corporate address.
6) We believe that Legacy Global Markets SA and Titan International Securities were hired as the dirty offshore broker to help clear the shares and facilitate the dumping of those shares into the market. It is common knowldege that Legacy is controlled by Gregg Mulholland in the background and Brian DeWitt on paper. Both Mulholland and DeWitt are close friends with Joseph Padilla. Joe Padilla is perhaps the most well known pump & dump broker in the business (now banned from being a registered broker). Learn more about Padilla in this report. It is also common knowledge that Titan is controlled by Kelvin Leach and Rohn Knowles.
Gregg Mulholland is no stranger to the SEC. He was named in litigation in the past for his role in the Rudy Nutrition (RUNU) pump & dump along with Pawel Dynkowski, Joseph Padilla, Chad Smanjak and others. It has long been known about Mulholland and Padilla's involvement in helping clear certs for Awesome Penny Stocks and other stock touts.
The most recent auditor for CYNK, Dale Paisley, once did accounting work for Gregg Mulholland.
According to thedeal.com, documents reflect that FINRA has already opened an investigation into Legacy Global Markets because of their involvement in past Awesome Penny Stock promotions as well as other pump&dump schemes. The list of offshore brokers being investigated for their roles in pump&dump schemes include:
"Caledonian Global Financial Services Inc., Caledonian Bank Ltd. and Caledonian Securities Ltd. in the Cayman Islands; Clearwater Securities Inc. in Belize; Legacy Global Markets SA and Argus Stockbrokers Ltd. in Cyprus; CBH Compagnie Bancaire Hevetique SA and Bank Gutenberg AG in Switzerland; and Verdmont Capital SA in Panama."
Our research reveals that both Legacy and Caledonian were involved in the trading activities for recently suspended pump&dump ticker, Pingify International Inc (PGFY) which also got suspended by the SEC during a Stock Tips promotion. See our report here. There are rumors that the entire float for PGFY was controlled by one individual from Vancouver.
On August 14, 2013, CYNK changed its corporate address to The Matalon, Coney Drive Suite 400 Belize City Belize which matches the same address for Legacy Global Markets SA and down the hall from Titan International Securities Inc whose name came up earlier this week in litigation involving Amogear Inc (AMOG) and some stock touts.
7) IntroBuzz eventually changed its name to Cynk Technology Group and applied for a new stock ticker symbol but that isn’t all. They also issued a 75:1 forward stock split.
8) FINRA approved the name/symbol change and forward split despite the suspicious set-up and all the free trading stock being owned by anonymous insiders. The new ticker and split became effective on July 15, 2013. The anonymous insiders now had 81,450,000 free trading shares costing just $.001/share.
9) Starting on June 17, 2014 CYNK became the center of market manipulation including in our opinion wash trading and other forms of market manipulation pushing the share price up from $.06/share to $21.95/share and drawing the attention of the mainstream media and earning the ticker an SEC suspension.
Individuals like Robert Banfield provide anonymity for fraudsters seeking offshore accounts in Belize. Firms like Legacy and Sterling Securities in Belize and Bank Gutenberg AG in Switzerland help scammers clear certs and completely manipulate and control the stock’s trading activity while attorneys like Gewerter provide baseless legal opinions to create free trading stock. Once the scammers have the free trading stock they hire paid touts and use other illegal manipulative practices to lure in investors who buy the shares they dump.
Who is the key insider? What is really going on?
Our opinion hasn't changed since over a year ago about who we think the key insider is for CYNK. That man is Phil Kueber.
As mentioned in our June 2013 CYNK report, Kueber was the main insider for many tickers that ended up being promoted by Awesome Penny Stocks or APS related sites (PEPR, WRIT, AMWI, CRWV, ABOT). Kueber's history with dirty players goes back much further than that having been closely involved with individuals like Jim Dial, John Jarvis, Alex Smid, and William Scott Marshall just to name a few.
In our original report we showed that the CYNK shell was originally incorporated in Nevada as IntroBuzz by Phil Kueber's brother, John Kueber. John Kueber also served as the original CEO for the company.
We showed that Phil Kueber reserved the name Cynk Technology Group before the IntroBuzz shell filed to use the new name for the ticker.
Learn more about the project here and here. Before very recently deleting his facebook page, Phil Kueber posted a link to the Diamante Belize facebook page directing visitors of the Diamante Belize facebook page to a youtube page for the project:
Phil Kueber's meetme page helps confirm the information. And the following are pictures of Phil Kueber (in the white shirt) at the construction site.
We don't think it is a coincidence that Phil Kueber who documents show is a CYNK insider is so active in Belize and so was CYNK.
You'll notice in this 2013 lawsuit (page 8 - image below) that Phil Kueber previously used the same address used by CYNK in Belize.
We also do not think it is a coincidence that the most recent nominee CEO for CYNK, Javier Romero, was from San Pedro, Belize (according to this News 5 Belize article) which is the same location the Ocean Front Condos are being built. This would explain how Phil Kueber found Mr. Romero to talk him into taking the nominee CEO position.
We are not quite sure how other nominee CEOs like Kenneth Carter and Marlon Luis Sanchez were found. Our guess is that Phil Kueber knew Kenneth Carter personally and that through some acquaintance/business partner Phil Kueber was introduced to Marlon Luis Sanchez. Regardless of how the nominee CEOs were found, the fact is that they were just names on paper. The true control person/persons were the ones that held all the free trading stock anonymously. Marlon Sanchez was reached for comment by the WSJ in this article. He said “I worked my magic for a year, my friend, and now you can see the results,” adding that he couldn’t speak further at this time. In a follow up WSJ article found here, Kenneth Carter was reached for comment and said he had the initial idea for the social network and received support from outside investors, whom he declined to specify. He said the investors took the company in a different direction from what he had in mind, so he quit following his lawyers advice and sold all his shares.
There are even unconfirmed rumors that Phil's son Phil Kueber Jr. (pictured on the left below - Phil Sr is on the right) has been in Belize working with a broker.
Perhaps upon getting involved in his Condo project in early 2012, Phil Kueber decided to take the old IntroBuzz shell which he incorporated through his brother, John, back in 2008 and take it public to use for an insider enrichment scheme to help make money to put towards the condo project. All or most of the free trading stock may have been owned by Phil Kueber and his family through anonymous Belize accounts set-up by somebody like Robert Banfield and arrangements were made with a broker like Legacy Global Markets SA (Gregg Mulholland and Brian DeWitt) to clear those certs and sell those shares into the market. Did Phil Kueber work alone? He has the background to have been able to do it, but some of the information we learned about Legacy and its involvement in PGFY do make us wonder if there is another big name connection involved in CYNK located in Vancouver perhaps even directly involved with Legacy Global Markets SA and Caledonian Securities Ltd.
Since the SEC shut down CYNK so early, we'll never know for sure if the future plans for CYNK may have included a paid promotion to help create huge amounts of volume for the anonymous insiders to sell a large chunk of those 81,200,000 free trading shares into.
Despite no real assets, no revenues, only one employee, and no real business operations (just a shell of a website), CYNK exploded to over $6 billion in market cap before getting suspended by the SEC becoming a media sensation in the process. Thanks to CYNK more eyes are now looking at the penny stock market and the type of opportunities that can sometimes arise there, but probably more importantly the main stream media and many people that don't usually even pay attention to penny stocks are learning very quickly what an ugly, dirty world the penny stock market really is. A world where fake companies and stock promotions and market manipulation is the norm and it is so easy for dirty insiders to set-up companies for future insider enrichment schemes and gain SEC and FINRA approval for those schemes.
Like so many times in the past (BIZM, OCTX, and, Awesome Penny Stocks as examples), we have laid out who we believe is involved in CYNK and how we believe the scheme worked. Now the question is will the SEC follow the bread crumbs? Hopefully some day we find out all the details about CYNK.