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Plot thickens in SEC case of a US$35b company no one knows

Friday, August 26, 2016 - 06:59

[MEXICO CITY] A key figure is stepping away from Neuromama Ltd, the obscure search engine firm whose market value surged to US$35 billion on little trading volume before US regulators halted its shares.

The departure of Vladislav Zubkis, listed as the chairman of Neuromama's advisory board, is the latest twist for a firm that recently relocated to a Mexican beach town from Russia and likens itself to Google and Yahoo.

Mr Zubkis, who also goes by Steven Schwartzbard, is taking an open-ended leave of absence, the company said in a filing this week with Securities and Exchange Commission.

After Neuromama's paper value jumped to exceed that of Delta Air Lines Inc, the SEC halted over the counter trading on Aug 15, citing "potentially manipulative transactions in the company's stock".

The regulator also cited concerns about the accuracy of information disclosed to investors about who controlled the company, which says its ambitions include licensing "heavy ion fusion" technology.

In its filing dated Aug 23, Neuromama defended Mr Zubkis, who's been previously sued by the SEC over a penny stock scam and received a prison sentence.

The company said Mr Zubkis was "a third-party contractor" rather than an employee and that his leave of absence was technically a temporary contract suspension.

The statement quotes chief executive officer Igor Weselovsky as praising Zubkis for doing "a magnificent job" and adding that Neuromama knew his past "perfectly well" before bringing him on as an adviser.

The company said Mr Zubkis asked for the leave due to concern that his continued involvement with Neuromama would embolden short sellers keen to drive down its shares.

Mr Zubkis also cited a "crusade to bring his daughter's murderer to justice" by persuading police to reopen the case, according to the statement.

"That will require so much of my attention that I won't be able to provide Neuromama executives with the 24/7 counseling they deserve," Mr Zubkis is quoted as saying in the filing.

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