"SpongeTech's replacement auditor, Robison Hill & Co., doesn't appear to be in the best standing with the PCAOB, either.
In a report earlier this year, the auditing watchdog blasted the Utah firm for numerous "audit deficiencies." The PCAOB determined that Robison "did not obtain sufficient competent evidential matter to support its opinion" on its clients' financial statements.
Metter acknowledged the report to The Post, saying he and his team "didn't know that" when they hired Robison in July. He said SpongeTech hired Deloitte & Touche to "oversee" Robison's work for 2008 and 2009, and to take over. Metter also said that SpongeTech has asked the SEC not to penalize it for the late filing. (Note: Deloitte & Touche informed Spongetech by letter that is WILL NOT provide services to Spongetech. The D&T rejection letter is part of the recent 8-K filing.)
Meanwhile, the company's complex stock trail has raised suspicions of stock manipulation. Timothy Sykes, a penny-stock trader and author of a book about running a hedge fund in college, has publicly accused the company of being "a blatant pump and dump" scam.
Sykes cites the fact that as of March, the company had 1.55 billion shares outstanding -- a 1,500 percent increase over last year. Several months prior, the company issued more than 300 million shares to a company tied to its executives, RM Enterprises, at a 40 percent discount."
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