A New York-based company that manufactures soap-filled sponges filed a lawsuit in New York State court Thursday claiming it was the target of a “short and distort” stock market manipulation scheme that involves a New York Post business reporter.
HedgeFund.net reporter Paula Schaap writes, “SpongeTech claims the scheme was concocted by Post business reporter Kaja Whitehouse and Tim Sykes, according to court documents.
“Sykes is the wunderkind who turned himself into a millionaire using his bar mitzvah money and shorting his way through penny stocks. He founded hedge fund firm Cilantro Fund Management which closed in 2007. Sykes now sells advice on trading in the penny stock market.
“As evidence that Whitehouse had teamed up with Sykes in its alleged campaign against the company, SpongeTech claimed that the reporter used Sykes as an ‘expert.’
“The lawsuit also claimed that David Patch, who posts to various investor online sites, sent complaints to the Securities and Exchange Commission about SpongeTech which he copied to Whitehouse and other news organizations.”
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