Drop Phones and Kickbacks Cited in SEC ForceField Stock Promo Complaint

1. This case concerns three schemes to defraud investors in ForceField Energy, Inc. (f/k/a SunSi Energies, Inc.) (referred to hereinafter as "ForceField"), a public issuer and Commission registrant whose common stock was traded on the NASDAQ Capital Market ("NASDAQ") from October 15, 2013 to April 20, 2015. 

2. All three schemes were orchestrated by ForceField's ex-Chairman, defendant St. Julien, with the other defendants serving as his accomplices for one or more of the schemes.

 3. In the first scheme, which took place between approximately October 2014 and April 2015, St. Julien hired defendant Mitchell, a purported "investor relations" professional, to pay cash kickbacks to the Registered Representative Defendants in return for their recommending and purchasing ForceField stock in their customers' accounts. The Registered Representative Defendants, all of whom were registered with the Commission and associated with registered broker-dealers, did not disclose to their customers that they were being paid these cash kickbacks. 

4. In the second scheme, which took place between approximately June 2012 and January 2014, St. Julien paid kickbacks to defendant Castaldo-a former registered representative who was found liable by a jury in 2009 for violating the federal securities laws- for the latter's successful solicitation of investors to buy ForceField stock in their personal brokerage accounts. Castaldo lured investors into investing in ForceField by first touting the company in an investment newsletter he sells to investors under the name of Wall Street Buy Sell Hold, Inc. ("WSBSH"). Although St. Julien paid Castaldo to tout ForceField in the WSBSH newsletter, Castaldo did not accurately disclose in the newsletter the amount of compensation he was being paid. 

5. Castaldo then solicited the investors who subscribed to the WSBSH newsletter to buy ForceField stock in their personal brokerage accounts. Castaldo advised these investors on the merits of investing in ForceField, but he did not disclose to them that St. Julien was paying him kickbacks of approximately 10% of the dollar amount of stock the investors bought. 

6. In the third scheme, which took place between approximately December 2009 and April 2015, St. Julien paid defendants Knippa and Petrossi, neither of whom was registered as a broker with the Commission, kickbacks in exchange for their successfully soliciting investments in ForceField's private placements of common stock and warrants. Knippa and Petrossi solicited investors at, among other places, investment conferences they attended with St. Julien. Knippa and Petrossi advised potential investors on the merits of investing in ForceField, but they failed to disclose to these investors that St. Julien was paying them kickbacks of 10% or more of the dollar amount of stock and warrants that investors purchased. Knippa went so far as to tout ForceField on the Fox Business Network's "Varney & Co." show as a purported market commentator without disclosing to the host or the viewers that he was ForceField's purported head of investor relations and was soliciting investors in exchange for kickbacks he expected to receive from St. Julien. 

7. In each of the three schemes, St. Julien and the other Defendants tried to conceal their illegal conduct by, among other things, having St. Julien pay most of the kickbacks through an offshore nominee he controlled. Mitchell and some of the Registered RepresentativeDefendants also sought to conceal their illegal conduct by communicating with each other on prepaid, disposable (i.e., "drop" or "burner") phones. Finally, St. Julien, Mitchell, and some of the Registered Representative Defendants sought to conceal their illegal conduct by communicating with each other using an encrypted, content-expiring messaging app on their cellphones. 

• SEC
• Complaint
• Stock Promotion
• Drop Phones
• ForceField
• Investor Relations
• Kickbacks
• BrokeAndBroker
• Bill Singer