Just two months after federal authorities tagged it as a pump-and-dump scheme, SpongeTech Delivery Systems has tumbled like a house of cards.
According to a three-page, check-the-box form filed with the federal bankruptcy court in Manhattan, the maker of soap-filled sponges has filed a petition for Chapter 11 voluntary bankruptcy.
It’s been a rapid tumble for the once high-flying New York company, whose logo was plastered across sports arenas as storied as Yankee Stadium and Madison Square Garden as recently as last year.
In May, the company’s two top officers, Michael Metter and Steven Moskowitz, were arrested on charges they obstructed an SEC investigation into their revenues. The SEC has charged them with lying about sales and fabricating customers in order to pump up the stock.
Last month, SpongeTech’s Georgia-based manufacturing company, once owned by Berkshire Hathaway, also filed for bankruptcy. The creditors accused Moskowitz of siphoning cash from the plant, including $700,000 in funds this year alone.