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The SEC's case against Dozy Mmobuosi sets his ultimate downfall

Dozy Mmobuosi is a Nigerian businessman and tech entrepreneur who is the founder and former CEO of Tingo, Inc., a technology and device-as-a-service platform aimed at accelerating digital commerce in Africa. Tingo is listed on the New York Stock Exchange (NYSE).

The U.S. Securities Exchange Commission (SEC) has charged the Nigerian businessman, who bid for an English Premier League football club with “massive fraud,” alleging that he and his three companies inflated their financial metrics to defraud investors.

The charges of massive fraud include the following: (1) fabrication of financial statements and documents of the companies and their Nigerian subsidiaries, (2) making material misrepresentations about the companies' business operations and financial success in press releases, SEC filings, and other public statements, (3) fabricating customer relationships to inflate the basis of their purported businesses, (4) siphoning off funds for personal benefit (luxury cars, travel, attempted acquisition of a Premier League team). And the alleged damages include defrauding investors worldwide through the aforementioned schemes and obtaining hundreds of millions in money or property through these schemes. Mr. Mmobuosi has called these accusations “baseless” and claimed that he will fight them “vigorously.”

The house of cards of Mr. Mmobuosi started to crumble when short-selling investment firm, Hindenburg Research, decided to take a close look into Tingo, Inc. and its founder. Hindenburg Research has built a reputation for being notoriously effective at exposing corporate fraud and bringing the master of the fraud down. Trevor Milton of Nikola Corporation; Gautam Adani of the Adani Group; and Carl Icahn of Icahn Enterprises were prior victims of Hindenburg Research. They each fell and lost considerable market share once Hindenburg took an interest in their case. Some even went to jail (as was the case with Trevor Milton, founder & former CEO of Nikola Corporation). Now, it is the turn of Dozy Mmobuosi and his company, Tingo Group, to be exposed by Hindenburg Research.

Tingo Group's Stock Price

Source: Yahoo Finance

In June 2023, Hindenburg Research accused Tingo Group of being "an exceptionally obvious scam" with fabricated financials and customer base. Tingo Group obviously denied the accusations. They claim their financials are accurate and criticize Hindenburg's report as based on "numerous errors of fact." Tingo's share price plummeted by over 50% following the report's release.

The scope of the fraud is staggering,” wrote the SEC in the 72-page complaint. “Since 2019, defendants have booked billions of dollars’ worth of fictitious transactions, through two Nigerian subsidiary companies Mmobuosi founded and controls, reporting hundreds of millions of dollars of non-existent revenues and assets.” The SEC suspended trading of Tingo shares in November 2023, citing “questions and concerns” surrounding the company.

If the alleged crimes that Dozy Mmobuosi is accused of, happened to be true, he will face serious legal, financial, and reputational consequences. The SEC could seek significant financial penalties from Mmobuosi and the companies involved. These penalties could run into the hundreds of millions of dollars, depending on the extent of the alleged fraud. If found guilty, Mmobuosi might be ordered to pay back any money or property he obtained through the alleged fraud. This could potentially bankrupt him and the companies involved. And even if he is ultimately cleared of the charges, the allegations of fraud could seriously damage Mmobuosi's reputation as a businessman and entrepreneur. This could make it difficult for him to raise capital or do business in the future.


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