TV-Touting Stock Promoter Pleads Guilty in $131 Million Scam
(Bloomberg) -- A stock promoter admitted he joined a plot to dupe investors out of $131 million by touting stock in a worthless LED lighting distributor, lying to investors while appearing on a cable television business show.
Herschel Knippa III, one of nine people charged in the scam, pleaded guilty Monday in federal court in Brooklyn, New York. Knippa teamed with brokers and other stock promoters to convince unwary investors that a company called ForceField Energy Inc. was worth hundreds of millions of dollars when it was worthless, Brooklyn U.S. Attorney Robert Capers said.
Knippa, owner and head trader of Dallas-based Kenai Capital Management LLC, a commodities trading firm, was asked during a 2014 appearance on Fox Business Network's “Varney & Co.” whether he owned shares of ForceField, prosecutors said.
“You bet I do,” he answered, according to prosecutors. “I put my money where my mouth is.”
Knippa actually owned no ForceField stock, prosecutors said.
Pocketed Thousands
On Monday, Knippa told U.S. Magistrate Judge Ramon Reyes that he pocketed thousands of dollars in secret payments from promoters.
“I know what I did was wrong,” he said.
Knippa collected more than $1.9 million from at least 10 investors, according to the U.S. He was arrested last year with Christopher Castaldo, a former Stratton Oakmont Inc. broker who worked for Jordan Belfort, depicted by Leonardo DiCaprio in the film, "The Wolf of Wall Street."
Knippa faces between 30 to 37 months in prison when he's sentenced by U.S. District Judge Brian Cogan in May. His lawyer, Jacob Kaplan, declined to comment after court.
So far, seven of nine defendants have pleaded guilty. Castaldo is scheduled to plead guilty on March 1, according to court records. His lawyer didn't return a call seeking comment.
The case is U.S. v. Mitchell, 16-cr-234, U.S. District Court, Eastern District of New York (Brooklyn).
To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net.
To contact the editor responsible for this story: David Glovin at dglovin@bloomberg.net.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
-
Joining The Dots | Dark Skies, Steady Diya: Why Hope Holds This Diwali
With war, a weak rupee and foreign outflows weighing on sentiment, policymakers at the NDTV World Summit and market veterans at NDTV Profit Ignite: Diwali Edition offered the same advice: stay invested and filter out the noise.
-
The Curious Case of Equitas Small Finance Bank And A CEO Who Quit For Stock
PN Vasudevan believes persistent investor concerns over a perceived conflict of interest had become a governance overhang on Equitas Small Finance Bank's stock, even as the lender improved profitability and asset quality.
