John Feloni and Stock Squirrel, Inc.
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25871 / September 29, 2023
Securities and Exchange Commission v. John Feloni et al., No. 1:23-cv-12233 (D. Mass. filed September 29, 2023)
SEC Charges Massachusetts Resident in $1.6 Million Securities Fraud
The Securities and Exchange Commission today 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 filed in the United States District Court for the District of Massachusetts, between at least 2019 and April 2023, Feloni and Stock Squirrel deceived approximately 180 retail investors into giving them almost $2.5 million. The 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.
The SEC’s case is being handled by David Fox, David London, Kerry Vasta, and Amy Gwiazda of the Boston Regional Office.
Last Reviewed or Updated: Sept. 29, 2023