ForceField Chairman Accused of Using Backroom Promoters
Trading in ForceField Energy Inc.’s ( NASDAQ: FNRG ) stock was halted Monday morning after falling 22 percent at 10:21 a.m. The New York-based LED lighting company told investors in a regulatory filing Monday that Richard St-Julien, founder and majority shareholder, was arrested on Friday and had resigned as chairman.
In a press release on Tuesday morning, the SEC announced that trading in ForceField shares would be suspended until at least May 5. The SEC suspended trading in shares, “due to concerns about the adequacy and accuracy of information available to investors concerning the funding of recent articles and promotions touting [the company].”
The SEC press release came on the heels of a Monday release from the Department of Justice that said St. Julien was arrested for securities fraud in Florida as he was attempting to board a flight to Costa Rica.
Forcefield Stock Manipulated Price
According to the criminal complaint, “since approximately August 2012 until April 2015, St. Julien and his co-conspirators engaged in a scheme to manipulate the price and trading volume of ForceField’s stock by using undisclosed nominee accounts, including an account held by a dermatologist in Boulder, Colorado, to purchase and sell the stock, and through the use of stock promoters and broker dealers who failed to disclose to potential investors that they had been paid by St. Julien to promote the purchase of the stock. St. Julien did not disclose his ownership and control of the shares purchased through nominees and used offshore banks, including in Belize, to pay the nominees to conceal his ownership and control. St. Julien coordinated the purchases by telephone and text messages.”
The DoJ says that “at the end of January 2015, St. Julien allegedly paid approximately $50,000 to a stock promoter through the dermatologist in Colorado. A few days later, the stock promoter began promoting the purchase of ForceField shares on its publicly available Facebook page, disclosing that his company had been paid $25,000 by an entity unrelated to St. Julien, or the dermatologist.”
Through his scheme, St. Julien and his co-conspirators deceived the investing public by creating the appearance of genuine trading volume and interest in ForceField’s stock, and as a result, from approximately January 2014 to April 2015, the price of the stock rose from a low of $4.55 per share to a high of $7.82 per share.
The company is also accused of failing to disclose that reports pumping its stock on the investor website SeekingAlpha.com were paid for by the firm.
The criminal case is U.S. v. St. Julien, U.S. District Court, Eastern District of New York (Brooklyn). The investor case is Atkinson v. ForceField Energy Inc., 1:15-cv-03020, U.S. District Court, Southern District of New York (Manhattan).