Florida Registered Broker Pleads Guilty to Securities Fraud

Florida Registered Broker Pleads Guilty to Securities Fraud

On Tuesday, November 8, Gerald Cocuzzo, a resident of Boca Raton, Florida and a broker registered with the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority, Inc. (FINRA), pleaded guilty to 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.”  When sentenced, Cocuzzo faces up to 20 years in prison, as well as restitution, criminal forfeiture, and a fine.

According to court filings and facts presented at the plea hearings, 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 January 2015 and April 2015, a ForceField executive paid commission payments, or kickbacks, to Cocuzzo in exchange for his purchase of ForceField stock in his clients’ brokerage accounts.  Cocuzzo did not disclose to his clients the kickbacks he was receiving for purchasing ForceField stock.  Cocuzzo 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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