The securities fraud law firm Fitapelli Kurta is investigating complaints against brokerage firms who recommended that their customers purchase shares of Cynk Technology. Recently, the Securities and Exchange Commission suspended trading in Cynk Technology. Cynk was trading on the OTC (over the counter exchange). On the OTC, stocks are thinly traded, so they can fluctuate much more rapidly than on major exchanges.
According to the Securities and Exchange Commission, Cynk Technology will be suspended from July 11, 2014 through July 24, 2014. The SEC suspended trading because of concerns regarding the adequacy and accuracy of information in the public marketplace. In addition, the Securities and Exchange Commission had reason to believe that there may have been some manipulative trading.
People in the financial industry have begun to question whether Cynk Technology was nothing more than a “pump and dump” scheme. In such a scheme, companies and individuals investors promote thinly traded securities to increase purchase activity, which in turn increases share prices. When the price of the share is “pumped up”, insiders begin to dump their shares at hefty profits. It appears that Cynk Technology had no assets and one employee, but the stock valuation reached $6 billion. This just does not make sense.
Stock brokers have an obligation to perform research and due diligence on the securities that they recommend to their clients. Even a simple review of Cynk Technology’s filings would have uncovered various issues with this company. In fact, the president and chief executive officer of OTC Markets Group, which owns the OTC exchange platform, stated that the “information was there for any investor to know they should avoid” Cynk Technology.
If you purchased Cynk Technology through a stock broker, please contact the stock fraud attorneys at Fitapelli Kurta today to evaluate your complaint. We represent investors in FINRA complaints against brokerage firms and litigate cases nationwide. Call us today for your free case evaluation. Do not delay.