The Securities and Exchange Commission (SEC) issued final rulings against John Feloni and his company Stock Squirrel, Inc.
Among other things, the judgments order the payment of more than $2 million in disgorgement, prejudgment interest and civil penalties to be paid separately by the two defendants.
The SEC charged Feloni and Stock Squirrel with violating federal securities laws in a complaint filed on September 29, 2023 in the United States District Court for the District of Massachusetts. The SEC complaint alleged that, between at least 2019 and April 2023, Feloni and Stock Squirrel defrauded approximately 180 retail investors into giving them nearly $2.5 million by claiming they would use the investors’ money for Stock Squirrel’s businesses , primarily developing a financial services smartphone offering in the fast-growing youth sector.
Instead, according to the complaint, Feloni embezzled about $1.6 million in investment funds — 66% of the total amount raised from investors — for his own use and made Ponzi-style payments to previous investors.
Without admitting or denying the allegations, Feloni and Stock Squirrel consented to the entry of final judgments permanently enjoining them from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and section 10 ( b ) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and imposes, on a common basis, relief in the amount of $1,719,871 and prejudgment interest of $158,839.51.
Feloni further consented to a final judgment: (1) ordering him to pay a civil penalty of $223,229; (2) prohibiting him from acting as an officer or director of any public corporation; (3) imposing a cent share bar; and (4) prohibiting him from participating, directly or indirectly, including but not limited to through any entity he owns or controls, in the issuance, purchase, offer or sale of any security, or engaging in activities intended to cause or attempt to cause the purchase or sale of any security; provided, however, that such order shall not prevent the Feloni from buying or selling securities for his own personal account.