Erez Law is currently investigating former Dawson James Securities, Inc. financial advisor Pranav Patel (CRD# 5391213) regarding a cash kickback scheme regarding recommendations in the penny stock ForceField Energy, Inc. ForceField Energy was a worldwide distributor and provider of LED lighting products and solutions.
Patel was registered with the following firms during the past few years:
- Dawson James Securities, Inc. in Boca Raton, Florida (January to December 2015)
- Columbus Advisory Group, Ltd. in New York, New York (March to December 2014)
- National Securities Corporation in Miami, Florida (May 2013 to March 2014)
- NSM Securities, Inc. in West Palm Beach, Florida (November 2012 to May 2013)
- CBG Financial Group, Inc. in Boca Raton, Florida (September 2009 to September 2012)
Over the past few years, oil prices have significantly declined. A supply glut in 2014 and 2015 led to some of the lowest prices the market has seen in recent years. In turn, securities values also dropped, including the values of ForceField Energy, Inc. The volatile energy sector experienced significant turmoil, and many energy companies were negatively impacted when global crude oil prices fell below $40 per barrel at the end of 2015. This was the lowest level since early 2009, as supply was in excess of global demand. Oil and gas companies experienced a spike in bankruptcies, which have left many investors reeling.
Forcefield Energy, Inc. was traded on the NASDAQ from October 15, 2013 to April 20, 2015. The company was involved in the manufacturing, distribution, and licensing of “alternative energy products and technologies.”
According to public records, in September 2017, the Securities and Exchange Commission (SEC) barred Patel. The SEC complaint alleged that Patel received cash kickbacks in return for recommending and inducing his customers to buy stock in ForceField Energy, Inc., a penny stock, without disclosing the kickbacks to his customers. The complaint also alleged that Patel attempted to conceal communications with other participants in the fraudulent scheme by using encrypted, content-expiring messaging apps, and otherwise engaged in a variety of conduct which operated as a fraud and deceit on investors. Patel pled guilty to one count of securities fraud in September 2016.
In May 2016, the Securities and Exchange Commission announced fraud charges against 10 individuals, one of them being Pranav Patel, involved in schemes to trick investors into buying shares of ForceField Energy, Inc. The schemes were allegedly fraught with cash bribes and other kickbacks to registered representatives and unregistered brokers who solicited investors to buy stock in ForceField Energy, Inc. The SEC alleges that investors were unaware those soliciting them were being paid by a ringleader, the company’s then-chairman of the board, to steer them to the stock, and that some of the perpetrators attempted to evade law enforcement by going so far as to communicate with prepaid disposable “burner” phones and encrypted, content-expiring text messages.
The first scheme took place between October 2014 and April 2015 and involved an investor relations professional Jared Mitchell who paid cash kickbacks to the registered representatives in return for recommending and purchasing stock in ForceField energy in customer accounts. Between June 2012 and January 2012, the second scheme involved cash kickbacks (in the amount of 10% of the invested amount) paid to Christopher Castaldo, a former registered representative who was found liable for violating the federal securities laws in 2009, who solicited investors to buy ForceField stock in their brokerage accounts by publicizing it in his investment newsletter to his clients. Between December 2009 and April 2015, the third scheme involved St. Julien who paid Hershel Knippa and Louis Petrossi kickbacks in exchange for soliciting investments in ForceField’s private placement of common stocks and warrants. Knippa and Petrossi solicited investors at conferences and on the Fox Business Network’s “Varney & Co.” show. The illegal conduct was allegedly attempted to be concealed through kickback payments via an offshore nominee and communication through prepaid, disposable cellphones and an encrypted, content expiring messaging app.
According to a statement by the Department of Justice U.S. Attorney’s Office Eastern District of New York, between 2009 and 2015, Patel and nine others engaged in a $131 million scheme to trick investors into buying shares of ForceField Energy. According to the case, Patel and the other brokers controlled the price and volume of traded shares of ForceField Energy by, “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 misleading appearance of genuine trading volume and interest in the stock; and (3) concealing secret payments to stock promoters and broker dealers who promoted and sold ForceField stock to investors and potential investors while falsely claiming to be independent of the company.”
Patel and the other representatives were offered cash bribes and other kickbacks to recommend the stock to their clients. The complaint alleges that investors were unaware those soliciting them were being paid to steer them to the stock, and that some of the perpetrators attempted to evade law enforcement by going so far as to communicate with prepaid disposable “burner” phones and encrypted, content-expiring text messages. ForceField Energy was delisted from the NASDAQ in May 2015, according to a statement by the company.
There are also pending felony charges against Patel, including Securities Fraud, Conspiracy to Commit Wire Fraud, Conspiracy to Commit Securities Fraud, and Money Laundering Conspiracy.
Patel has been the subject of three customer complaints between 2010 and 2016, according to his CRD report:
- June 2016. “The civil filing alleges that Mr. Patel sold $62,855 of ForceField Energy Inc. to a total of 5 clients and was subsequent compensated $2144 away from the Firm by the agents of the issuer.” The customer is seeking $62,855 in damages and the case is currently pending.
- October 2011. “Client alleged misrepresentation, unsuitable recommendations, and breach of fiduciary duties.” The customer sought $450,000 in damages and the case was settled for $75,000.
- March 2010. “Client alleges unauthorized trading activity.” The customer is seeking $1,960.73 in damages and the case is currently pending.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Dawson James Securities, Inc. and other firms may be liable for investment or other losses suffered by Patel’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
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