Former Registered Broker Guilty In A $131 Million Market Manipulation Scheme

[nitpicker]

https://www.justice.gov/usao-edny/pr/former-registered-broker-pleads-guilty-securities-fraud-conspiracy-participating-131

Department of Justice
U.S. Attorney’s Office
Eastern District of New York

FOR IMMEDIATE RELEASE
Monday, February 27, 2017

Former Registered Broker Pleads Guilty To Securities Fraud Conspiracy For Participating In A $131 Million Market Manipulation Scheme

Defendant Profited By Promoting To Investors Worthless Stock Of A Company That Purported To Be A Worldwide Distributor And Provider Of LED Lighting Products

BROOKLYN, NY – Earlier today, Herschel C. Knippa III, also known as “Tres,” a former registered broker who was the owner of a commodities trading firm and who regularly appeared on television news networks to discuss investment strategies, pleaded guilty to conspiracy to commit securities fraud in connection with the fraudulent market manipulation of ForceField Energy Inc. (ForceField), a publicly-traded company listed on the NASDAQ under the ticker symbol “FNRG.” The guilty plea was entered before United States Magistrate Judge Ramon E. Reyes, Jr. at the federal courthouse in Brooklyn, New York. When he is sentenced, Knippa faces up to five years in prison, as well as restitution, criminal forfeiture, and a fine.
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According to court filings and facts presented at the plea hearing, between January 2009 and April 2015, the defendant, together with others, engaged in a scheme to defraud investors in ForceField, a purported worldwide distributor and provider of LED lighting products and solutions, by artificially controlling the price and volume of traded shares of ForceField through, among other means: (1) using nominees to purchase and sell ForceField stock without disclosing this information to investors and potential investors; (2) orchestrating the trading of ForceField stock to create the appearance of genuine trading volume and interest in the stock; and (3) concealing payments to stock promoters and broker dealers who promoted and sold ForceField stock to investors and potential investors while claiming to be independent of the company. The defendants’ fraudulent scheme caused a loss of approximately $131 million to the investing public.

Between July 2014 and March 2015, Knippa received commission payments, or kickbacks, from a ForceField executive for promoting the purchase of ForceField stock to investors, including by making presentations at investor conferences and by speaking about ForceField during television appearances on the Fox Business and Business News Network channels. Knippa did not disclose his compensation arrangement during those conferences and television appearances, and falsely claimed to own ForceField stock when he did not. Knippa and his co-conspirators took pains to conceal their participation in the fraudulent scheme by using prepaid, disposable cellular telephones and encrypted, content-expiring messaging applications to communicate with each other, and by paying kickbacks in cash.
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[nitpicker]

1. Link to DoJ PR on sentencing

https://www.justice.gov/usao-edny/pr/former-registered-broker-pleads-guilty-securities-fraud-conspiracy-participating-131-0