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SEC halts trade in mysterious $35 billion OTC stock

Posted by: Admin | Posted on: August 16th, 2016 | 0 Comments


The U.S. Securities and Exchange Commission on Monday temporarily halted trading in Neuromama Ltd (NERO.PK), whose shares last traded about $56 over the counter, citing concerns including “potentially manipulative” transactions.

The company, whose website and filings say it runs a search engine based on neural technology, is in talks to license “heavy ion fusion” and sells a line of computing devices, had a market value of about $35 billion as of the stock’s last trade on Aug. 5.

That puts the Baja California, Mexico-based company ahead of Twitter Inc (TWTR.N), American Airlines Group Inc (AAL.O) and Sprint Corp (S.N).

Neuromama was valued at $4.73 billion on Jan. 15, 2014, when it had 630.1 million shares outstanding, according to a regulatory filing.

The company has not filed quarterly results since then.

The SEC on Monday also cited the accuracy and adequacy of information on “the identity of the people in charge of the company” as reasons for the halt. (bit.ly/2biwKlK)

Steven Schwartzbard, chairman of the company’s advisory board, said the suspension was in response to pressure from short-sellers.

“We’re suffering from a negative side effect caused by our success. That’s the only way I can put it,” Schwartzbard said in an email to Reuters.

“We went public, as virtually all small public companies do, on the over-the-counter market. And everything was fine while the stock sold for $5 or $7.50 a share.”

Neuromama’s stock had more than quadrupled this year to $56.25 as of its last trade on Aug. 5. The stock’s 100-day average volume was 418 shares.

Schwartzbard, who also goes by Vladislav “Steven” Zubkis, also said Neuromama had all intentions to upgrade its listing to Nasdaq.

The company said on Monday it was cooperating with the SEC to ensure the suspension was lifted on Aug. 27.

The SEC previously sued Schwartzbard in 1997 for orchestrating a securities fraud scheme involving boiler-room stock sale techniques.

In 2007, he was sentenced to five years in prison after pleading guilty to charges that he defrauded investors out of $1.8 million in connection with the construction of a storage facility and renovation of a Las Vegas Casino.

(Reporting by Anya George Tharakan in Bengaluru; Additional reporting by Alexandra Alper in Mexico City and Nate Raymond in New York; Editing by Sriraj Kalluvila)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/wDS11zFcC50/us-neuromama-sec-idUSKCN10Q22T

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