The United States (US) Securities and Exchange Commission (SEC) says Odogwu Mmobuosi, the former chief executive officer (CEO) of Tingo Group, and three companies affiliated with him, have been ordered by a court to pay over $250 million in monetary relief in a securities fraud suit default judgment.
The default judgment was given by Jesse M. Furman, a US judge, who said Mmobuosi and his companies failed to respond to a SEC lawsuit accusing them of overstating financial results.
In a statement on August 29, the SEC said the US district court for the southern district of New York entered final judgments against Mmobuosi, also known as Dozy Mmobuosi, and three US-based entities, Tingo Group Inc., Agri-Fintech Holdings Inc., and Tingo International Holdings Inc, on August 28.
Mmobuosi was accused by the SEC of a multi-year scheme to inflate the financial performance metrics of his companies and key operating subsidiaries to allegedly defraud investors worldwide.
On December 18, 2023, the SEC charged Mmobuosi for providing “false information to investors,” and “orchestrating a staggering fraud”.
Two days later, Mmobuosi temporarily stepped down as Tingo Group’s co-CEO.
A month before he stepped down, the SEC suspended trading in the securities of Tingo Group.
In one of the instances given in the statement on Thursday, SEC said in Tingo Group’s fiscal year 2022 form 10-K filed in March 2023, the company reported a cash and cash equivalent balance of “$461.7 million in its subsidiary Tingo Mobile’s Nigerian bank accounts when in reality those same bank accounts had a combined balance of less than $50 as of the end of fiscal year 2022”.
SEC said Mmobuosi was barred from serving as a director of a public company, promoting a penny stock or participating in the trading of any security.
“The judgment against Mmobuosi includes a bar from serving as an officer or director of a public company, a penny stock bar, and a bar from participating in the purchase, sale, offer, or issuance of any security,” the regulator said.
Also, SEC said Mmobuosi, Tingo Group, Agri-Fintech Holdings, and Tingo International Holdings were barred from violating the anti-fraud provisions of the Securities Act of 1933, violating the reporting, books and records, and internal control provisions of the Exchange Act and Exchange Act Rules.
“The judgments, entered on the basis of default, enjoin Mmobuosi, Tingo Group, Agri-Fintech Holdings, and Tingo International Holdings from violating the anti-fraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder,” SEC said.
“The judgments also enjoin Tingo Group and Agri-Fintech from violating the reporting, books and records, and internal control provisions of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1, 13a-11, and 13a-13, and enjoin Mmobuosi from aiding and abetting violations of the same.
“The judgments also enjoin Mmobuosi from violating the lying to auditors, certification, and falsification of books and records provisions of Section 13(b)(5) of the Exchange Act and Exchange Act Rules 13a-14, 13b2-1, 13b2-2(a), and 13b2-2(b), and periodic filing requirements of Section 16(a) of the Exchange Act and Rule 16a-3 thereunder.”
The commission said Tingo International and Mmobuosi were ordered jointly and severally to pay a disgorgement of $156.67 million with prejudgment interest of $20.19 million.
SEC said they were also ordered “to disgorge for cancellation all shares of Agri-Fintech stock that Tingo International and Mmobuosi own”.
“Agri-Fintech and Mmobuosi are ordered jointly and severally to pay disgorgement of $12,164,000.00 with prejudgment interest of $574,682.90 and to disgorge for cancellation all shares of Tingo Group stock that Agri-Fintech and Mmobuosi own,” the US stock market regulator said.
“Mmobuosi is also ordered to pay disgorgement of $27,632,627.93 with prejudgment interest of $2,032,811.14, to disgorge for cancellation the $204,000,000.00 promissory note inuring to his benefit against Tingo Group, and a civil penalty of $31,908,704.21.
“Tingo Group, Agri-Fintech, and Tingo International are also ordered to pay a civil penalty of $1,152,314.00 each.”
On August 24, Mmobuosi said the fraud allegations against him were motivated by malice and the allegations of infractions against his business interests are “baseless and unfounded”.
