SEC Suspends Trading in OTC Stock After Value Soars to $35 Billion
August 15 2016 - 09:40PM
Dow Jones News
The U.S. Securities and Exchange Commission on Monday suspended
trading in the shares of Neuromama Ltd., saying it was concerned
that manipulation had inflated the value of the unlisted company to
$35 billion.
In an order published Monday, the SEC said it halted trading in
the firm's shares until Aug. 26 out of concern that false
information, including a claim that the company would have it
shares listed on the Nasdaq Stock Market, was driving demand for
its stock. Its value had quadrupled in the past four months, rising
as high as $56.25 a share in over the counter trading.
The company's website claims that Neuromama.com is a "leader in
technology, innovation & research" and urges investors to
"learn how we're changing the world." The site says the company has
partnered on projects with Mexico's Department of Culture, has
developed a search engine and social network, and is seeking
financing to build a casino and resort in Ensenada, a coastal city
on the Baja California peninsula.
Neuromama hasn't disclosed annual financial results since April
2013, when it reported having total assets worth just $4,721 and
was known as Trance Global Entertainment Group Corp. In a quarterly
filing made nine months later, the company valued its assets at
$18.2 million, most of which it attributed to a "library of
entertainment assets" that it acquired in September. In separate
correspondence with the SEC, the company said the entertainment
assets included 65 Jazz Network TV shows "as well as a syndication
agreement that includes Direct TV and Dish Network among other
distribution channels."
The website says the company's advisory board is chaired by
Steven Schwartzbard, who also goes by the name Vladislav Steven
Zubkis. In an email, Mr. Zubkis blamed the SEC's action on "the
pressure from short sellers" and said his attorneys were in contact
with the SEC. He said Neuromama's stock price had surged because
tech companies "carry high valuation."
"We are looking to cooperate and make sure thing is resolved,"
Mr. Zubkis said in a phone interview.
The SEC in 1997 previously sued Mr. Zubkis over claims that he
illegally sold $10 million worth of shares in International Brands
Inc. to investors and made fraudulent statements about the
company's revenue and future stock price. A disclosure on
Neuromama's website says he later spent five years in federal
prison. News accounts show that prosecutors accused him of
defrauding investors of more than $1.8 million related to a Las
Vegas casino purchase and development of a storage facility.
Write to Dave Michaels at dave.michaels@wsj.com
(END) Dow Jones Newswires
August 15, 2016 21:25 ET (01:25 GMT)
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