(Reuters) - A Dallas-based trader was sentenced to 15 months in prison on Wednesday after pleading guilty to taking part in a scheme to pump up the stock price of LED lighting company ForceField Energy Inc, which U.S. prosecutors have said caused investor losses of $131 million.
Herschel Knippa, 47, was sentenced by U.S. District Judge Brian Cogan in Brooklyn federal court, prosecutors announced. He was also ordered to pay $3.57 million in restitution.
“Mr. Knippa accepts responsibility and looks forward to moving on from this unfortunate chapter in his otherwise unblemished life,” Knippa’s attorney, Alex Spiro, said in an email.
Prosecutors said that in 2014 and 2015, Knippa, owner of Kenai Capital Management LLC in Dallas, talked up now-worthless ForceField stock on the Fox Business cable television network and elsewhere while being paid kickbacks from an executive at the company to do so.
They said that during one July 2014 appearance on Fox Business’s “Varney & Co,” Knippa lied to host Stuart Varney when asked whether he owned ForceField stock by responding: “You bet I do. I put my money where my mouth is.”
Knippa was among nine people charged in May 2016 with scheming to pump up ForceField shares. Authorities said the defendants manipulated the stock from December 2009 to April 2015 by secretly trading it in undisclosed accounts, inflating trading volume to create a false sense of demand and concealing kickbacks to stock promoters and brokers to tout it.
In addition to Knippa, four other defendants - an investor relations professional and three brokers - have been sentenced, receiving prison terms ranging from three months to three years.
Of the remaining four defendants awaiting sentencing, three have pleaded guilty and one was convicted after a trial.
The charges followed the April 2015 arrest of Richard St. Julien, a Canadian citizen who was executive chairman of ForceField, previously called SunSi Energies Inc.
St. Julien was charged separately and has cooperated with prosecutors, court records show. He has not been sentenced.
Reporting by Brendan Pierson in New York, editing by G Crosse
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