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A sign for the Securities and Exchange Commission (SEC) is pictured in the foyer of the Fort Worth Regional Office in Fort Worth, Texas June 28, 2012. REUTERS/Mike Stone
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(Reuters) - The U.S. Securities and Exchange Commission on Monday temporarily halted trade in Neuromama Ltd
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.
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.
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."
The spike in Neuromama’s market value is redolent of the story of Cynk Technology Corp
Between June 17 and July 10, 2014, Cynk Technology shares shot from 6 cents apiece to nearly $22, a gain of nearly 22,000 percent, and slipped to $13.90 before trading was suspended. When the stock resumed trading on July 25, 2014, it sank hard and fast and regained its status as a penny stock within two days.
In May, a man admitted to involvement in what prosecutors called a large "pump-and-dump" scheme involving Cynk. Another man who prosecutors said also helped run the scheme, pleaded guilty earlier that month to a money laundering conspiracy charge.
Pump-and-dump scams involve a group of insiders that artificially bid up shares of a company to lure in unsuspecting buyers and then quickly bail out of the stock at a profit.
No such charges have been filed in the Neuromama case.
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 and Rodrigo Campos in New York; Editing by Sriraj Kalluvila, Bernard Orr)
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