On 23 December 2024, the United States Securities and Exchange Commission (US SEC) issued an order under Section 15(b) of the United States Securities Exchange Act of 1934, permanently barring Richard Brown from associating with any broker-dealer, investment adviser, or other regulated entities. Brown’s involvement in a fraudulent kickback scheme tied to Forcefield Energy, Inc. stock sales and follows a final judgment entered against him by the United States District Court for the Eastern District of New York.
The US SEC’s administrative order formalised its sanctions against Richard Brown, a former registered representative of a broker-dealer. The order permanently bars him from the securities industry and prohibits his participation in any penny stock offerings. The judgment permanently enjoined him from violating antifraud provisions under the United States Securities Act of 1933 and the United States Securities Exchange Act of 1934.
Richard Brown, a 45-year-old resident of Huntington, New York, was a registered representative at a broker-dealer from 2012 to 2015. During this time, he engaged in a scheme involving undisclosed cash kickbacks to recommend and induce customers to purchase shares of Forcefield Energy, Inc. without informing them of his financial incentives.
On 2 August 2016, Brown pleaded guilty to one count of securities fraud in a criminal case before the United States District Court for the Eastern District of New York. This conviction stemmed from his role in defrauding investors by concealing the kickbacks he received for recommending Forcefield Energy shares. On 27 January 2021, Brown was sentenced to three years’ probation and ordered to pay $1,735,000 in restitution.
The SEC’s complaint in the civil case further alleged that Brown violated Section 17(a) of the Securities Act and Section 10(b) of the United States Exchange Act, as well as Rule 10b-5 under the United States Exchange Act, which deals with fraudulent conduct in the sale of securities, including nondisclosure of material conflicts of interest.
The US SEC’s final order took immediate effect upon issuance on 23 December 2024. Brown is permanently barred from associating with any entities regulated by the SEC, including brokers, dealers, and investment advisers. Additionally, he is prohibited from participating in any penny stock offerings.
(Source: https://www.sec.gov/files/litigation/admin/2024/34-102031.pdf)
