Dozy Mmobuosi fined $250 million in SEC fraud case

Nigerian entrepreneur Dozy Mmobuosi has been ordered to pay over $250 million in fines after a fraud case brought by the US Securities and Exchange Commission (SEC).

The ruling represents a significant fall for the fintech executive, who gained attention last year with his attempt to acquire Sheffield United, a historic English football club.

The final judgement against Mmobuosi and his businesses, which include the Nasdaq-listed Tingo Group, Agri-Fintech Holdings, and Tingo International Holdings, was handed down by Judge Jesse M. Furman of the US District Court for the Southern District of New York. According to the court, Mmobuosi and his businesses “failed to answer, plead, or otherwise defend” against the December-filed civil action from the SEC.

Mmobuosi was charged by the SEC with masterminding a massive scam by manipulating the financial statements of his businesses to fool foreign investors. According to the accusation, his business empire was largely a “fiction,” with claims to operate in the fintech and agricultural technology sectors. The SEC went on to say that Mmobuosi’s enterprises’ alleged assets, revenues, expenses, clients, and suppliers were “virtually entirely fabricated.”

Tingo Group, under Mmobuosi’s control, claimed a customer base of over nine million Nigerian farmers and a robust food processing operation. However, the SEC’s investigation revealed that these claims were grossly exaggerated. One striking example involved Tingo Mobile, a Tingo Group subsidiary, which reported cash and cash equivalents of $461.7 million in 2022, while the SEC found the actual balance was less than $50.

When US-based short-seller Hindenburg Research published a report last year characterising Tingo Group as an “exceptionally obvious scam,” it brought attention to Mmobuosi’s enterprises. Tingo’s stock price fell by more than 60% as a result of the investigation, which also raised major concerns about Mmobuosi’s operational validity.

Following the report, the SEC suspended trading in Tingo Group and Agri-Fintech Holdings, citing “questions and concerns regarding the adequacy and accuracy of publicly available information.”

The court’s ruling not only imposes significant financial penalties on Mmobuosi but also bars him from serving as a director of any public company, effectively ending his corporate career.

Credit: Nairametrics