US Court Bars Nigerian Billionaire From Stock Trading, Slams $250m Fine Against Him, Firms

The United States Securities and Exchange Commission said it has been informed that the US District Court for the Southern District of New York has entered a default judgment against Dozy Mmobuosi, the former Chief Executive Officer of Tingo Group, Inc., and against three affiliated entities, ordering them to pay more than $250 million in monetary relief in a securities fraud case. US. District Judge Jesse M. Furman delivered the judgment against Mmobuosi after he and his companies failed to respond to the commission’s allegations of financial misconduct. The U.S. District Court for the Southern District of New York made the ruling on 28 August 2024.

According to the SEC, Mmobuosi and his affiliated companies, which include Tingo Group Inc., Agri-Fintech Holdings Inc., and Tingo Holdings Inc., had carried out a multi-year scheme to manipulate and inflate some key financial performance metrics of the respective issuers and their major subsidiaries. The idea was to deceive investors worldwide. The agency alleged that Mmobuosi cooked the books, provided phony information to investors, and orchestrated a scheme in hopes of making it appear as though his companies were in better financial health than they actually were.

This investigation by the SEC found that Mmobuosi, along with his companies, had been into fraud by falsifying records and inflating key financial performance indicators. These thereafter inflated the stock price of the company artificially and fooled the investors. From these findings, it is quite evident that this was a scheme in which companies were made to look more profitable and stable than they actually were, attracting more investors and increasing the value of the stocks.

As earlier reported on Legit.ng, SEC accused Mmobuosi of disseminating false information to investors, following which his appointment as co-CEO of Tingo Group was suspended by its board. The commission further placed a halt on trading in the securities of Tingo Group, pointing to the weight of the charges of improper conduct against Mmobuosi and his companies.

The ramifications from the findings of the SEC and the judgment entered by the court are severe. The SEC has barred Mmobuosi from being a director of any public company, from promoting penny stocks, and from trading in any security. Essentially, this takes him completely out of the sphere of public securities markets to protect investors from his misconduct in the future.

Additionally, the SEC ordered Mmobuosi, Tingo Group, together with the affiliated companies, to desist from violations of various provisions under the securities laws of the U.S., including the anti-fraud provisions of the Securities Act of 1933, and the reporting, books and records, and internal control provisions of the Securities Exchange Act of 1934. This is a statutory provision meant to ensure appropriate transparency and accuracy in financial reporting for the protection of investors and maintenance of integrity in the financial markets.

Entering judgment, the court ordered Mmobuosi and Tingo International to pay disgorgement of $156.67 million, which represented the profit made from the fraudulent conduct, together with prejudgment interest of $20.19 million. The court further ordered that all shares of Agri-Fintech stock owned by Tingo International and Mmobuosi be canceled. It ordered Agri-Fintech to pay a fine of $574,682.90 and to cancel all shares of Tingo stock that it and Mmobuosi own.

Mmobuosi himself has to pay more in financial penalties: He was ordered to pay a disgorgement of $27.6 million, inclusive of more than $2 million in prejudgment interest. Additionally, he was ordered to disgorge more than $204 million due to the rescission of a promissory note that was issued for his benefit against Tingo Group. A civil penalty of more than $31 million was imposed on Mmobuosi, showing how the SEC makes sure that individuals and entities answer for their fraudulent activities.

These charges by the SEC against Mmobuosi and his companies will send a strong signal into the consequences of financial misconduct. The SEC seeks to continue with substantial fines and bars of key individuals from participating in the securities market on the basis of transparency, accountability, and investor protection principles in the financial industry.