Tingo Group (NASDAQ:TIO) was the subject of a Hindenburg Research short report in June. The short seller accused Tingo of inflating its financials and misleading statements while also questioning the background of founder Dozy Mmobuosi.
“Overall, we think Tingo is a worthless and brazen fraud that should serve as a humiliating embarrassment for all involved. We do not expect the company will be long for this world,” said Hindenburg.
Tingo refuted all the allegations and announced that it had hired a law firm to examine the claims.
Fast forward a few months, and the Securities and Exchange Commission (SEC) has now caught on. This morning, the federal agency announced that it had charged Mmobuosi and three of his affiliated companies, Tingo, Agri-Fintech Holdings, and Tingo International Holdings, with fraud. Furthermore, the SEC charged Tingo, Mmobuosi, and Agri-Fintech with reporting, books and records, and internal controls violations.
Mmobuosi is also on the hook for failing to properly disclose insider sales of Agri-Fintech and lying to auditors.
TIO Stock: SEC Files Charges Against Tingo Group
The SEC alleges that Tingo fabricated financial statements and made misleading statements to its investors, including its relationships with other companies, since at least 2019. The SEC gave an example of these alleged financial misdeeds in its press release:
“For instance, Tingo Group’s fiscal year 2022 Form 10-K filed in March 2023 reported a cash and cash equivalent balance of $461.7 million in its subsidiary Tingo Mobile’s Nigerian bank accounts. In reality, those same bank accounts allegedly had a combined balance of less than $50 as of the end of fiscal year 2022.”
As part of the complaint, the SEC seeks a temporary restraining order that would freeze Mmobuosi’s assets and prevent the three named companies from transferring money or property, among other actions. The SEC has also requested emergency relief to protect corporate and investor assets and to prevent the defendants from disseminating false information.
Shares of TIO stock received a two-week trading suspension on Nov. 14 after the SEC conducted an investigation into the company. Tingo Group disclosed that its shares would remain halted while the SEC continues its investigation.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
