Type of alert:
SEC Complaint
The Securities and Exchange Commission issued a Complaint in early May against Richard St. Julien, ex-chairman of ForceField Energy, Inc., and nine other individuals who were allegedly involved in schemes orchestrated by St. Julien to trick investors into buying shares of ForceField stock. ForceField Energy is listed with the SEC as a business in “alternative energy and products and technologies,” distributing LED and other lighting products. St. Julien faced a criminal charge of conspiracy to commit securities fraud last year filed by the U.S. Attorney’s Office for the Eastern District of New York, with the nine individuals involved now facing criminal charges.
According to the SEC’s Complaint, St. Julien allegedly conducted the following schemes:
- Between October 2014 and April 2015, St. Julien hired Jared Mitchell, an investor relations professional, to pay cash kickbacks to the brokers Pranav V. Patel, Richard L. Brown, Gerald J. Cocuzzo, Naveed A. Khan, and Maroof Miyana in return for their recommending and purchasing ForceField stock in their customers’ accounts. These registered broker-dealers did not disclose to their customers that they were being paid these cash kickbacks.
- Between June 2012 and January 2014, St. Julien paid kickbacks to Christopher F. Castaldo, president of WSBSH and Stock Traders Press Inc., for the successful solicitation of investors to buy ForceField stock in their personal brokerage accounts. Castaldo succeeded in doing so by promoting ForceField to potential investors in published investment research reports, in telephone calls, and in person. Castaldo failed to accurately disclose to his readers the amount of compensation he was being paid to promote ForceField nor did he disclose to them that St. Julien was paying him kickbacks of approximately 10% of the dollar amount of stock the investors bought.
- Between approximately December 2009 and April 2015, St. Julien paid Louis F. Petrossi and Herschel C. Knippa kickbacks in exchange for successfully soliciting investments in ForceField’s private placement offerings. Knippa and Petrossi solicited investors at investment conferences among other places, with Knippa making an appearance as a market commentator on the Fox Business Network’s “Varney & Co.” show and touted ForceField as a good investment. Knippa and Petrossi failed to disclose to potential investors that they were being compensated for this solicitation.
St. Julien and the other parties involved allegedly tried to conceal this illegal conduct by transferring money to and from an offshore account, communicating on a prepaid “burner” phone, and even downloading an app that encrypts messages and subsequently deletes them once read.
The SEC is seeking to permanently prohibit St. Julien and the other nine alleged co-conspirators from engaging in acts, practices, transactions, and courses of business alleged in the SEC Complaint as well as repay their earnings during the alleged illegal soliciting with prejudgment interest and pay civil money penalties. Additionally, the SEC is seeking to bar St. Julien, Castaldo, and Petrossi from selling penny stocks, with Julien also facing an officer-and-director bar which would prohibit him from serving as a director or officer of a public company.
