SEC Charges Stock Squirrel and John Feloni in $1.6 Million Securities Fraud
On September 29, 2023, the SEC charged Massachusetts-based company Stock Squirrel, Inc. and John Feloni, its president and CEO, with defrauding investors of approximately $1.6 million in an unregistered securities offering. According to the SEC’s complaint Feloni and Stock Squirrel deceived approximately 180 retail investors into investing approximately $2.5 million into Stock Squirrel. The SEC complaint alleges that Feloni and Stock Squirrel falsely claimed they would use investors’ money for Stock Squirrel’s business, principally by developing a smartphone application offering financial services to the fast-growing youth sector, and that Feloni would not take a salary from Stock Squirrel. Instead, according to the complaint, Feloni misappropriated approximately $1.6 million of investor funds—66% of the total amount raised from investors—for his own use. The complaint alleges that, in return for investors’ money, Feloni and Stock Squirrel both issued stock in Stock Squirrel to the investors and promised them returns on their investments as high as 20-24% in short periods via promissory notes. Feloni and Stock Squirrel also allegedly used funds raised from new investors to make Ponzi-like payments to prior investors in furtherance of their fraudulent scheme.
The SEC’s complaint charges Feloni and Stock Squirrel with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and the registration provisions of Sections 5(a) and 5(c) of the Securities Act. The complaint seeks injunctive relief, disgorgement plus prejudgment interest, and civil monetary penalties from Feloni and Stock Squirrel, and an officer and director bar and penny stock bar against Feloni.
To speak with a Securities Attorney, please contact Brenda Hamilton at 200 E Palmetto Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, or by email at [email protected]. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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Brenda Hamilton, Securities Attorney
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