Instagram/javierthelieutenant Everyone has been going nuts over a penny stock, CYNK Technology, that has surged 25,000% since mid-June. 
 
 Friday, the Securities and Exchange Commission suspended trading of CYNK until July 24. 
 
 CYNK Technology operates a "social network" called Introbiz.com. The company has no revenue, assets, or full-time employees. It has also been a mystery who runs the company. 
 
 According to a filing with OTC Markets, the company's CEO is Javier Romero. 
 
 "Javier Romero is the President, CEO, Secretary, Treasurer, and Director of Cynk Technologies, Inc. Since 2009 Mr. Romero has been a Fisheries Officer for the Government of Belize based out of Belize City," the filing says. 
 
 Other than that, there's scant information available on Romero. 
 
 Introbiz is a website that allows users to pay for connections to celebrities and business people on social media. We were able to track Romero down via a more old-fashioned technology, Facebook, where the profile includes photos of him flying airplanes and fishing. 
 
 On the Facebook messaging system, he seemed to match the description on the filing. He told us that he's from Belize and lives in Boston. He also said he's learning how to fly airplanes and that he used to work as a fishery officer back in Belize. 
 
 Eventually, we asked for his number and called him up. 
 
 When reached by telephone, the man responded when we addressed him as "Javier." But after we told him we were working on a story about CYNK Technology, he quickly told us that he's not Javier and that his name is Jason. 
 
 "Jason" told us that he works for Javier, but doesn't work for the company. He said that he's been friends with Javier since they were kids in Belize. He also said that Javier is in Boston for the next few days. 
 
 Here's what we talked about on the phone: 
 
 BI: Hey Javier, it's Julia. 
 
 "Jason": Hi. How are ya? 
 
 BI: How are you doing? 
 
 "Jason": [laughs] All right. 
 
 BI: Are you in Boston right now? 
 
 "Jason": I am actually. 
 
 BI: I'm a reporter and I've been really impressed with this company I know you're affiliated with — CYNK Technology and Introbiz. I was wondering if you could help me out and tell me more about it. 
 
 "Jason": [laughs] Hey, I actually knew there was basically something like that going on. 
 
 BI: So were you surprised the stock went up so high? 
 
 "Jason": Well, actually I'm not Javier. I work for him. 
 
 BI: Wait. But why are you Javier on Facebook? That's a little weird. 
 
 "Jason": Yeah. I work for him. 
 
 BI: Well, where's Javier? 
 
 "Jason": He's actually out right now. I don't really want to disclose his business. I can definitely get a number for you guys. 
 
 BI: Yeah. So do you work at CYNK, too? 
 
 "Jason": I don't. I just work for him. I don't know. 
 
 BI: Oh you work for him, but you don't work with Introbiz? 
 
 "Jason": I do not. 
 
 BI: If you're not 'Javier' then what's your name? 
 
 "Jason": My name is Jason. 
 
 BI: Jason what? 
 
 "Jason": Hah. Ahhh like I said if you want to give me a number I can have him reach you guys. 
 
 BI: Is he also in Boston with you? 
 
 "Jason": He is here. He will be here for a couple of days. 
 
 BI: Is he really excited about the stock? 
 
 "Jason": I'm sure he's going nuts about it or whatever. We haven't really talked about it. Like I said, I just work for him. 
 
 BI: You get to be Javier on Facebook? 
 
 "Jason": He asked me to check out his stuff. I just let him know what's going on. 
 
 BI: Does he usually let you talk to girls on his Facebook? 
 
 "Jason": Uh, no. 
 
 BI: I was really hoping you could give me a little more insight into this. 
 
 "Jason": Personally, I don't know much. I just work for the guy. We've been very good friends since we were young. He recently got a hold of me and said he has a job for me. 
 
 BI: How did you guys meet? 
 
 "Jason": You know like I said Julia I don't know if I should be talking to anyone about this. 
 
 BI: You sound a little nervous on the phone. 
 
 "Jason": Yeah no, because I'm not supposed to be talking to too much people on his Facebook for him. I was just supposed to check his message. Then, here's this good looking girl and she wants to talk to me. I got a little carried away, OK. 
 
 Jason has our number and we'll update if he or Javier gets in touch. Meanwhile, we might just reach out on Introbiz. ||||| Cynk Technology Corp., the supposed social-network operator that caught the attention of the financial world with its skyrocketing stock price, was suspended from trading by the U.S. Securities and Exchange Commission. 
 
 The halt is because of “concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in CYNK’s common stock,” the SEC said today on its website. Judith Burns, a spokeswoman for the agency, declined to comment further. 
 
 Cynk’s social network appears to have no members, no revenue, no assets and only one employee. The stock-price chart has been the talk of all manner of business blogs and Twitter pundits, from Business Insider to the Wall Street Journal and Zero Hedge, which has called Cynk’s moves “pure madness.” 
 
 Cynk climbed as much as 49 percent to $21.95 yesterday in over-the-counter trading on volume of more than 380,000 shares before erasing its gain to close down 5.5 percent to $13.90. After closing at 6 cents on May 15, it began its surge with a 3,650 percent jump to $2.25 on June 17. The stock rose as much as 36,000 percent from May 15 to yesterday’s intraday high. 
 
 “The issue of stock manipulation, or perceived stock manipulation, particularly in the penny market, is extremely common, and it’s a challenge to the regulators,” said Jacob Frenkel, a former SEC enforcement official who’s now a securities attorney at Shulman Rogers Gandal Pordy & Ecker PA. “Real companies get hurt when the entire space gets tagged as bad because of really bad incidents such as this.” 
 
 Source: Introbiz.com Introbiz offers services to buy contact information of various types of people, including celebrities such as Nicole Kidman and Johnny Depp. Close Introbiz offers services to buy contact information of various types of people,... Read More Close Open Source: Introbiz.com Introbiz offers services to buy contact information of various types of people, including celebrities such as Nicole Kidman and Johnny Depp. 
 
 ‘Buyer Beware’ 
 
 Before the SEC said the stock was suspended, it had been halted by the Financial Industry Regulatory Authority. The halt was reflected on the website of OTC Markets Group Inc., which runs venues for trading penny stocks. It marks stocks it deems suspicious, including Cynk, with a skull-and-crossbones icon and a “buyer beware” warning. 
 
 Once OTC Markets “skull and crossbones something,” brokerage firms lock it down, said Cromwell Coulson, the company’s president and chief executive officer. 
 
 “Ninety-nine percent of investors take a look at a stock like this and say no way,” Coulson said. “One percent says that would be fun to trade.” 
 
 The surge in the shares may have occurred because of difficulty in shorting the stock, or borrowing the shares and betting they’ll decline, as well as brokerage compliance systems preventing owners from selling after the suspicious jump in price, Coulson said. 
 
 ‘Out of Whack’ 
 
 “The big challenge is how can we get the information out to help Finra halt these and speed up the SEC suspension process to easily stop these heavily promoted securities that trade completely out of whack,” he said. “They’re a waste of time for our capital markets, hurt small-company capital formation and are harmful to investor confidence.” 
 
 A message left today for Cynk wasn’t immediately returned. 
 
 In Cynk’s last quarterly earnings report, filed with the SEC in November 2013, the company reported a $1.5 million net loss and no revenue for the first nine months of the year. The bulk of that loss came from stock-based compensation, which was listed under operating expenses. 
 
 The document was signed by Marlon Sanchez, Cynk’s one employee at the time of the filing. He was listed as president, CEO, chief financial officer and secretary. A June 2013 filing showed Sanchez holding a 72 percent stake in the company. 
 
 Belize Headquarters? 
 
 Cynk said in its most recent filing from April that its headquarters are in Suite 400 of the Matalon, an office building in Belize City, Belize. The Matalon does not have a Suite 400, said Tiffany Techeco, secretary of building. She also said there is no main company with the name Cynk Technology; Introbiz, which is the name of Cynk’s website; or Introbuzz, the company’s former name. 
 
 Cynk’s website, Introbiz.com, was created in June 2009 and uses GoDaddy Inc. as its Internet domain registrar and for Web hosting services. A Scottsdale, Arizona-based proxy company, Domains by Proxy, which promises to protect clients’ identities, registered the site. 
 
 Introbiz offers services to buy the contact information of various types of people, including celebrities such as Nicole Kidman and Johnny Depp. It is currently possible to create an account on the website, deposit money through PayPal, or purchase information with a credit card or PayPal. 
 
 (An earlier version of this story was corrected to show that OTC Markets wasn’t responsible for halting the stock. It was halted by the Financial Industry Regulatory Authority.) 
 
 To contact the reporter on this story: Jing Cao in New York at hcao38@bloomberg.net 
 
 To contact the editors responsible for this story: Sarah Rabil at srabil@bloomberg.net Crayton Harrison, Stephen West ||||| Justin Lane/European Pressphoto Agency 
 
 The government has taken its strongest action against hedge funds as part of a vast investigation into insider trading on Wall Street. 
 
 Federal prosecutors on Tuesday announced charges against three hedge fund managers, depicting a “triangle of trust” in which the three shared tipsters and illegally pooled confidential information about publicly traded technology companies. The complaint also details a brazen cover-up that involved destroying computer hard drives with pliers and tossing them into random Manhattan garbage trucks in the dead of night. 
 
 Two of the managers charged, Noah Freeman and Donald Longueuil, were accused of insider trading while employed at SAC Capital Advisors, the Stamford, Conn., hedge fund run by the billionaire Steven A. Cohen. The two join several other former SAC employees who have been ensnared by the government’s investigation. Neither SAC nor anyone now at the fund has been accused of wrongdoing, and it is cooperating with the investigation. 
 
 The recent charges stem in part from the investigation that led to the arrest in October 2009 of Raj Rajaratnam, the billionaire co-founder of the Galleon Group and the most prominent hedge fund executive charged with insider trading. But government investigators have been increasingly examining hedge fund traders’ use of so-called expert network firms. These research firms are essentially matchmakers, connecting hedge funds with employees at public companies and other specialists who are paid to provide the funds with insight into their businesses and industries. 
 
 Over the last 16 months, Preet Bharara, the United States attorney in Manhattan, has charged 46 people with insider trading. Of those, 29 have pleaded guilty. At least eight associates of expert network firms have been charged. 
 
 Now prosecutors have turned their focus and harsh words to the hedge funds that they say traded on confidential information. 
 
 Mr. Bharara said on Tuesday that while there was nothing inherently wrong with hedge funds or expert network firms, “if you have galloped over the line; if you have repeatedly made a mockery of market rules; if you have converted a legitimate enterprise into an illegal racket, then you have done something wrong and you will not get a pass.” 
 
 At a news conference Tuesday, Mr. Bharara deplored the prevalence of illegal trading on Wall Street. He said that, given the scope of the allegations, “we are not talking simply about the occasional corrupt individual; we are talking about something verging on a corrupt business model, for the defendants seem to have taken the concept of social networking and turned it into a criminal enterprise.” 
 
 The complaint announced Tuesday, which accuses the three of trading on confidential information passed along by insiders at technology companies, also describes how two of the hedge fund managers tried to conceal their crimes. 
 
 After reading news articles in November about a grand jury investigation into insider trading, Mr. Longueuil destroyed the flash drive on which he had logged his conversations with company insiders, as well as two external hard drives bearing incriminating evidence, the complaint says. 
 
 It says he recounted his actions in a taped telephone conversation with Mr. Freeman. 
 
 “You take two pairs of pliers, and then you rip it open,” Mr. Longueuil, said, according to the complaint. “Pulled the external drives apart. … Put ’em into four separate little baggies, and then at 2 a.m. … 2 a.m. on a Friday night, I put this stuff inside my black North Face … jacket, … and leave the apartment and I go on like a 20 block walk around the city … and try to find a, a garbage truck … and threw the [expletive] in the back of like random garbage trucks, different garbage trucks … four different garbage trucks.” 
 
 At the news conference Tuesday, Mr. Bharara called the cover-up effort described in the complaint “something out of a bad movie” and joked that this probably was the first time that a Wall Street portfolio manager used pliers as “a tool of the trade.” 
 
 SAC said in a statement, “We are outraged by the alleged actions of two former employees, which required active circumvention of our compliance policies and are egregious violations of our ethical standards.” 
 
 It added, “They were employed at SAC for a short time and were dismissed in January 2010 and June 2010, respectively, due to poor performance.” 
 
 Mr. Freeman, 35, worked at SAC from July 2008 to mid-2010 and was based in Boston. He has pleaded guilty and is cooperating with the government. His lawyer, Benjamin E. Rosenberg, declined to comment. 
 
 Mr. Longueuil, 34, worked at an SAC unit from June 2008 to January 2010. He was arrested at his Manhattan home on Tuesday. Mr. Longueuil’s lawyer, Craig Carpenito, declined to comment. 
 
 The third fund manager charged with insider trading on Tuesday was Samir Barai, 39, a former Citigroup executive who ran Barai Capital Management. He has surrendered to authorities. His analyst, Jason Pflaum, 38, was also charged on Tuesday. He has pleaded guilty and is cooperating with the government. 
 
 Evan Barr, a lawyer for Mr. Barai, declined to comment. Mr. Pflaum’s lawyer, Michael Grudberg, declined to comment. 
 
 The charges against the two former SAC employees add to the list of people and funds identified in the insider trading investigation with ties to the hedge fund, one of the largest and most successful on Wall Street. 
 
 Richard Choo-Beng Lee, who worked at a unit of SAC from 1999 through 2004, pleaded guilty in 2009 to insider trading related to activity after he left SAC. 
 
 Level Global Investors and Diamondback Capital Management, two hedge funds started by top SAC executives, were raided by the Federal Bureau of Investigation in January. Each fund has said it is not a target of the investigation and is cooperating with authorities. 
 
 In January, the Securities and Exchange Commission filed civil insider trading charges against Trivium Capital Management and its owner, Robert Feinblatt, a former SAC trader. Mr. Feinblatt’s lawyer could not be reached for comment. 
 
 Tuesday’s developments are part of what Mr. Bharara, the United States attorney, has described as “rampant” insider trading on Wall Street. His office is preparing to try Mr. Rajaratnam, the Galleon co-founder, this month. Mr. Rajaratnam maintains his innocence. 
 
 The charges against Mr. Rajaratnam and a number of his associates helped spawn the latest prosecutions involving expert network research firms. 
 
 On Tuesday, Robert Khuzami, director of enforcement at the S.E.C., cited Primary Global Research, a “matchmaking” firm with eight associates who have been charged with insider trading. 
 
 “The only matching that was going on here was to match theft with greed,” he said. 
 
 The S.E.C. brought parallel civil charges against the three fund managers and the analyst. The commission accuses them of netting more than $30 million in profits from trading on confidential information provided to them by insiders at companies including Seagate Technology and Fairchild Semiconductor. 
 
 Expert networks began over the last decade as Wall Street banks scaled back their internal research departments. They have also grown as a result of Regulation Fair Disclosure, a decade-old S.E.C. rule that requires publicly traded companies to disclose material information to all investors at the same time. 
 
 Hedge funds eager to find an investment edge began paying the firms to connect them with employees of publicly traded companies and other industry specialists. Roughly one-third of professional money mangers use expert network firms, according to a recent study. 
 
 Mr. Bharara’s office has used extraordinary investigative tactics to prosecute insider trading. Much of the evidence that federal prosecutors have used to bring charges, including those announced Tuesday, has come from telephone wiretaps. 
 
 On Tuesday, Janice K. Fedarcyk, who is in charge of the F.B.I.’s New York office, underscored the power of using wiretaps as a prosecutorial tool. 
 
 “The evidence laid out in the complaint is largely the defendants’ own words,” Ms. Fedarcyk said. “For all their presumed sophistication, they lacked a mobster’s better-honed instincts for conversational discretion. That was to our great advantage.” 
 
 Peter Lattman/The New York Times 
 
 Criminal Complaint Against Barai and Longueuil 
 
 The Amended S.E.C. Complaint ||||| Photo: Jeff Gross/Getty Images 
 
 There was a time, not too long ago, when a fool who wandered into the world of investments could very well be separated from his money with the help of any number of dumb, overpriced, or downright fraudulent schemes. Then, in 2008, the economy went into freefall, and everyone who had money left held onto their checkbooks a little more tightly. Fear bred caution, and some of the worst offenders in the dumb-money chase were forced to close up shop, or at least become a little more discreet about their advantage-taking. 
 
 Now, with five years of air between Lehman Brothers and the present, the seal has been lifted. Athletes and virtual currencies are being traded alongside Ford and General Electric. Venture capitalists are pitching start-up stocks to the unwashed masses. And later today, the SEC is expected to propose new rules that will make it even easier for companies to fleece the unsuspecting public. 
 
 Yes, ladies and gentlemen, the age of bullshit investments is back. 
 
 Look around today’s markets and you’ll see a surfeit of senseless investment opportunities wearing the cloak of legitimacy. 
 
 You’ll see, on page one of the New York Times, a start-up called Fantex touting a new investment vehicle that allows fans of NFL running back Arian Foster to support his career by purchasing stock that gives them a share of his future earnings. (What didn’t make page one: Foster’s career-worst game the very next Sunday.) This investment opportunity, which will appeal mainly to those too young to remember Bowie Bonds, is a terrible idea on multiple fronts: It bases returns on the unpredictable performance of professional athletes, it gives stock that can only be traded on a private, relatively illiquid exchange, and its single-athlete stock can be converted into common Fantex stock whenever the company feels like it. 
 
 Look harder, and you’ll see companies like Goldman Sachs throwing millions of dollars at hare-brained schemes like Motif Investing, a “theme-based stock investment platform” that allows rank amateurs to make up “motifs” of stocks they think are going to behave in a certain, coordinated way. (Professional stock traders do this all the time, without calling it a “motif” strategy — but they don’t charge ordinary people what can amount to double-digit fees, nor do they base their investment decisions on “Companies with lots of Facebook likes,” as Motif suggests.) 
 
 You’ll see Bitcoins, the everlasting fascination of Silicon Valley crypto-geeks, being not only spoken about as an investment-grade commodity despite having higher volatility than your average Baldwin brother, but inspiring entire investment vehicles (one of which is structured by celebrity twins) that give ordinary investors as well as the tech-savvy crowd the chance to lose money when the fad runs its course. You’ll also see art dealers trying to convince you that betting on the paintings of unknown artists is a sound portfolio move. 
 
 Some of these bad ideas spring from the normal irrational exuberance that comes with an economic bounce-back, and the fact that many investors are more willing to jump into murky waters than they were in 2008. But there are other factors in play, too. The JOBS Act, for one, was a post-crisis law that was meant to make it easier for companies to raise money. Instead, by paving the way for equity crowdfunding and making it possible for private investors to hawk their services like Cracker Jack vendors at Yankee Stadium, the law opened a Pandora’s box of truly unwise investments. 
 
 Thanks to the JOBS Act, there are now crowd-funding bazaars that make gambling in the markets as easy as picking a Spotify playlist. There’s also the newest West Coast fund-raising trend, the venture capital syndicate, which makes it possible for average shmoes with little to no market expertise to enter into highly risky investments with early stage start-ups, and which has put the sentence “Miley Cyrus could be the next big tech investor” within the realm of the possible. 
 
 There’s a lot to take in, between the NFL-stock-trading and the Miley Cyrus venture capital buffoonery. But the upshot is that between the rise of the social web, the recovering economy, and the deregulatory impact of the JOBS Act, it’s now easier than ever for you to lose money in fun-sounding ways. This is fine if you have disposable income to spare, which many of the people who meet the SEC’s threshold for being an “accredited investor” (someone with a $1 million net worth or an individual annual income of $200,000) do. But other accredited investors are doctors, lawyers, and workaday tech nerds who know next to nothing about the stock markets, but are gullible enough when flashy investments are shined in their faces. For these people, no number of “treat it as casino money” caveats will suffice; they will inevitably succumb to the pitch, and they will lose money. 
 
 I’m not the only one noticing that things are getting dangerous. Felix Salmon says that years of near-zero interest rates and the JOBS Act gold rush mean that “even the smart money has started funding companies at utterly bonkers valuations.” Josh Brown, a financial advisor and CNBC regular, told me in an e-mail that the “ludicrous” investing climate “is a byproduct of the giddiness we’re seeing amongst the owners of financial assets. We’ve eclipsed the 2007 peak of household net worth but the makeup is very different. More has accrued to the upper echelon and the lesson that group has learned about the nature of investing is that even if we blow up, the Fed and Congress will ensure that come out of it in even better shape.” And the SEC has been busting record numbers of petty thefts and boiler-room schemes — many of which reflect the intersection of well-intentioned but underinformed investors with slick profiteers claiming to have access to the next big thing. 
 
 The truly scary part of what’s happening now is that it’s not a particular asset bubble, nor the sketchy practices of a coterie of bankers, that’s endangering the investment portfolios of normal people. It’s the deregulated system itself that poses the threat. Unlike in 2008, this exuberance won’t end in a sudden crash, brought on by shady practices at large investment firms. It will be a slow flow of assets from the information-deprived to the information-rich, in the form of fees and other completely legal wealth transfers. 
 
 Whatever the cause — be it interest rates or income inequality, the JOBS Act or simply the state of the S&P and the folly of man — make no mistake: The investment environment is as hostile to ordinary investors as it’s been in many years. The best course of action is simply to do very little — to invest in low-cost index funds, or just follow Harold Pollack’s now-famous Financial Advice Index Card. But if you must invest in things beyond the ordinary and boring, watch your wallet: Your next big mistake may be just around the corner.
– Too good to be true? A company with just one employee, no assets, and no revenue saw its penny stocks rocket to a $6 billion valuation this summer—enough for the SEC to shut down its trading and launch an investigation, the Wall Street Journal reports. The company, Cynk, runs a website called Introbiz.com designed to help connect people with celebrities and various kinds of professionals. Fair enough—until its stock leaped by 25,000% since June, notes Business Insider. Worse, the company address in Belize City, Belize, is inaccurate (Cynk apologized) and the company's shares have swapped hands three times over six years, always between people who were the CEO and sole employee. More details: Business Insider found someone matching CEO Javier Romero on Facebook and called him up. He answered to Javier until the reporter identified herself, when he said he was really Jason. Javier is "actually out right now," he said. "I don't really want to disclose his business. I can definitely get a number for you guys." Stock manipulation in the penny market is "extremely common" and hard to regulate, an expert tells Bloomberg. Another says that "one percent" of investors would trade in a company like Cynk—but stock promoters hardly helped, raving on Twitter that the stock "keeps surging higher!!" and "this could be EPIC!!" The SEC probe is part of its recent crackdown on penny-stock fraud. Over the past two years, the commission has halted trading in over 1,300 companies. The blog Zero Hodge drew attention to the stock this week, quipping, "Lord Overstone said it best. 'No warning can save people determined to grow suddenly rich.'"