SEC v. John Feloni; and Stock Squirrel, Inc., No. 1:23-cv-12233, District of Massachusetts (Sept. 29, 2023) — Complaint

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
v. Case No.
JOHN FELONI and
STOCK SQUIRREL, INC.,

Defendants. JURY TRIAL DEMANDED

COMPLAINT
Plaintiff United States Securities and Exchange Commission (“Commission” or “SEC”)
alleges the following as to defendants John Feloni (“Feloni”) and Stock Squirrel, Inc. (“Stock
Squirrel” and, collectively with Feloni, “Defendants”):
SUMMARY
1. Between at least 2019 and April 2023, Feloni and Stock Squirrel deceived
approximately 180 retail investors into giving them almost $2.5 million. Feloni and Stock
Squirrel falsely claimed that they would use investors’ money for Stock Squirrel’s business,
principally by developing a smartphone application (“Stock Squirrel App”) offering financial
services to the fast-growing youth sector, and they represented that Feloni would not take a
salary from Stock Squirrel. Contrary to their representations, Feloni used approximately $1.6
million of investor funds—66% of the total amount raised from investors—to pay his personal
expenses and to make other payments with no apparent connection to Stock Squirrel’s business.
Feloni used the funds he took from Stock Squirrel investors as his primary means of support

2
throughout the duration of his fraudulent scheme. In return for investors’ money, Feloni and
Stock Squirrel issued both 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.
2. By engaging in the conduct alleged, Defendants violated, and unless restrained
and enjoined, will continue to violate, Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933
(the “Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange
Act”) and Rule 10b-5 thereunder.
3. Based on these violations, the Commission seeks: (a) permanent injunctions; (b)
disgorgement of Defendants’ ill-gotten gains, plus prejudgment interest; (c) civil penalties; (d) a
permanent injunction restraining Feloni, directly or indirectly, including but not limited to
through any entity he owns or controls, from (i) participating in the issuance, purchase, offer or
sale of any security, or (ii) engaging in activities for purposes of inducing or attempting to induce
the purchase or sale of any security; provided, however, that such injunction shall not prevent
Feloni from purchasing or selling securities for his own personal account; (e) an order barring
Feloni from participating in any offering of a penny stock; (f) an officer and director bar against
Feloni; and (g) such other and further relief as the Court deems just and proper.
JURISDICTION AND VENUE
4. The Commission brings this action pursuant to the enforcement authority
conferred upon it by Section 20(b) of the Securities Act [15 U.S.C. § 77t(b)] and Section 21(d) of
the Exchange Act [15 U.S.C. § 78u(d)].
5. The Court has jurisdiction over this action pursuant to Section 22(a) of the
Securities Act [15 U.S.C. § 77v(a)] and Sections 21(d), 21(e), and 27 of the Exchange Act [15
U.S.C. §§ 78u(d), 78u(e), 78aa].

3
6. Venue lies in this District pursuant to Section 22(a) of the Securities Act [15
U.S.C. § 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa] because a substantial
part of the acts constituting the alleged violations occurred in Massachusetts, Feloni resides in
Massachusetts, Stock Squirrel’s principal place of business is in Massachusetts, and Defendants
transact business in Massachusetts.
7. In connection with the conduct described in this Complaint, Defendants directly
or indirectly made use of the mails or the means or instruments of transportation or
communication in interstate commerce. Feloni communicated by mail, email and telephone with
multiple investors in Stock Squirrel who reside in states outside Massachusetts.
8. Defendants’ conduct involved fraud, deceit, or deliberate or reckless disregard of
regulatory requirements, and resulted in substantial loss, or significant risk of substantial loss, to
other persons.
DEFENDANTS
9. John Feloni, age 64, resides in Somerville, Massachusetts. Feloni is the President
and CEO of Stock Squirrel and its sole officer and director.
10. Stock Squirrel, Inc. is a Delaware Corporation with a principal place of business
in Somerville, Massachusetts. Its principal office is Feloni’s residence. Stock Squirrel and its
stock are not registered with the Commission in any capacity.

4
FACTS
I. Feloni and Stock Squirrel Solicited Investments From
Retail Investors in Several States.
11. From at least 2019 through April 2023, Feloni and Stock Squirrel offered a
purported investment opportunity to invest in Stock Squirrel’s business, which consisted
primarily in the development of the Stock Squirrel App to be released to the public. Feloni and
Stock Squirrel claimed on the website they maintained for Stock Squirrel and in communications
with investors and potential investors that the Stock Squirrel App’s users would be able to
purchase fractional shares of stock in public companies when they made purchases from those
companies’ stores. They claimed on Stock Squirrel’s website that, for example, a user could
make a $4 purchase at an international coffee roaster chain using a debit card registered with
Stock Squirrel, and the Stock Squirrel App would automatically purchase forty cents’ worth of
fractional shares of the coffee company’s public stock.
12. Feloni and Stock Squirrel solicited approximately 180 investors residing in
multiple states, including Massachusetts, Rhode Island, Maine, and Texas, via email and in-
person and telephone conversations. Feloni had personal relationships with some but not all of
the investors.
13. In exchange for invested funds (typically ranging from $1,000 to $10,000), Feloni
and Stock Squirrel sent investors two instruments: (i) a promissory note signed by Feloni and (ii)
shares of Stock Squirrel stock.
14. The promissory notes typically offered 10% interest payable in six months. The
promissory notes also typically provided for a different interest rate of between 18 and 24%
annually on any amounts not paid after the due date. Feloni signed the promissory notes, which
did not mention Stock Squirrel on their face.

5
15. The amount of stock each investor received was memorialized in a one-page letter
(the “Stock Letter”) stating, “as of this date you have a total ownership of [a certain number of]
shares of Stock Squirrel, Inc., a Delaware corporation.” The Stock Letters further stated,
“Physical shares will be issued to you asap, but in the meantime your ownership is official as of
today.” The letters were signed by Feloni both in his personal capacity and in his capacity as
President of Stock Squirrel.
16. Feloni and Stock Squirrel did not register the offering of Stock Squirrel stock or
promissory notes with the Commission. In general, Feloni and Stock Squirrel issued Stock
Squirrel stock to investors at a rate of five million shares per ten thousand dollars invested.
II. Defendants Falsely Represented That Investor Funds
Would Be Used to Develop the Stock Squirrel Business.
17. In communications with investors and potential investors, Feloni described the
development of Stock Squirrel’s business, including its business operations and expenses. In so
doing, Feloni expressly or impliedly represented that he would use investors’ funds to further
develop Stock Squirrel’s business, particularly by developing the Stock Squirrel App.
18. Feloni and Stock Squirrel fraudulently failed to disclose to investors and potential
investors, however, that Feloni: (a) intended to use, and in fact used, the majority of investors’
funds for personal expenses and other payments with no apparent connection to Stock Squirrel’s
business, and (b) used money obtained from later investors to pay back earlier investors. Failure
to disclose these crucial facts rendered Feloni’s and Stock Squirrel’s statements materially false
and misleading.
19. Defendants knew, recklessly disregarded, or were negligent in not knowing, that
Feloni used the majority of investors’ funds to pay for personal expenses and to make other
payments with no apparent connection to Stock Squirrel’s business.

6
20. Feloni is the sole officer and director of Stock Squirrel and fully controls Stock
Squirrel. Feloni’s conduct is imputed to Stock Squirrel by virtue of his control over the company.
21. As described in paragraphs 22 through 27, Defendants made specific false
representations to investors and potential investors regarding their use of investors’ funds
purportedly to develop Stock Squirrel. In all of these communications, Defendants fraudulently
failed to disclose that Feloni used the majority of investors’ funds for personal expenses and
other payments with no apparent connection to Stock Squirrel’s business. Multiple people made
investments in Stock Squirrel after receiving these communications.
22. On June 19, 2020, Feloni and Stock Squirrel sent a series of emails to a list of
investors and potential investors. The emails described several features Stock Squirrel was
proposing to implement in the Stock Squirrel App, services it purportedly planned to offer to
public companies, and multiple public relations, marketing and law firms Stock Squirrel retained
or planned to retain to develop Stock Squirrel’s business. On July 17, 2020, an investor who
received this email invested $2,000 in Stock Squirrel. On August 3, 2020, another investor who
received this email invested $5,000 in Stock Squirrel.
23. Beginning on June 24, 2020, Feloni and Stock Squirrel sent a series of emails to a
list of investors and potential investors. The emails attached a document entitled “Stock Squirrel,
Inc. Executive Summary Overview,” which described Stock Squirrel’s business plan and
included the following planned expenses:
a. Building a database of prospective Stock Squirrel App users in order to
market Stock Squirrel’s services to them;
b. Marketing efforts such as “Squirrel Fest – an expo on college campuses
around the country;”

7
c. Retaining several marketing and public relations firms to market Stock
Squirrel’s products; and
d. Retaining vendors to develop a “loyalty and reward partner program” to
offer to public companies.
On August 14, 2020, an investor who received this email invested $2,500 in Stock Squirrel.
24. In a July 6, 2020 email to an investor, Feloni claimed, “I’ll be putting a lot of
money in the tech development.”
25.  On December 30, 2020, Feloni and Stock Squirrel sent a series of emails to at
least three investors in which they claimed Stock Squirrel would retain a new customer
acquisition agency that purportedly had previously worked for a prominent broker-dealer
catering to young people and that had extensive experience acquiring young customers. On
January 19, 2021, an investor who received this email invested $1,000 in Stock Squirrel.
26. On December 17, 2022, Feloni and Stock Squirrel sent a series of emails to a list
of Stock Squirrel investors and potential investors. In these emails, Feloni and Stock Squirrel
claimed to have spent considerable time ensuring that the Stock Squirrel App complied with SEC
and other r egulations. The emails further claimed that Stock Squirrel would pursue a number of
other ventures to develop its business “over the next year or two,” including:
a. Acquiring a broker-dealer firm;
b. Acquiring a company that offers “carbon credits” to the public that can be
used to support environmental sustainability projects;
c. Developing and offering a range of marketing and investor relations
services to public companies;

8
d. Offering fractional shares in works of art, real property, private
companies, and cryptocurrency to investors;
e. Offering services to facilitate donations to charitable organizations;
f. Launching the Stock Squirrel App in India;
g. Opening Stock Squirrel-branded restaurants on college campuses;
h. Hiring a prominent investor and other “influencers of stature” as Stock
Squirrel spokespeople; and
i. Partnering with a company owned by another prominent investor to
produce investor education videos aimed at schoolchildren.
On December 19, 2022, an investor who received this email invested $10,000 in Stock Squirrel.
27. In approximately January 2023, Feloni met in person with a group of investors
and prospective investors in which he represented that he did not take any salary from Stock
Squirrel. During this discussion, Feloni continued to represent that investors’ funds would be
used to develop Stock Squirrel’s business, particularly by developing the Stock Squirrel App. On
January 23, 2023, an investor who was at this discussion invested $10,000 in Stock Squirrel.
III. Feloni Misappropriated Investors’ Funds for Personal Use.
28. From 2019 through April 2023, Feloni and Stock Squirrel raised approximately
$2.5 million from investors. Feloni also received approximately $350,000 from other sources
during this period. Most investors made their investments by writing checks payable to Feloni.
Feloni instructed these investors to make their checks payable personally to him rather than to
Stock Squirrel. Feloni deposited these checks into his personal bank accounts. Some investors
also made their investments with cash, which Feloni deposited into his personal bank accounts.
Other investors made wire transfers directly to Feloni’s personal bank accounts.

9
29. Several investors referenced in the memo line of their checks that their funds were
for investment in Stock Squirrel. For example:
a. On March 18, 2021, an investor wrote a check to Feloni for $5,000 with a
memo line stating, “Stock Squirrel 2.5m shares common stock.”
b. On March 26, 2021, an investor wrote a check to Feloni for $5,000 with a
memo line stating, “Stock Squirrel common stock 2.5m shares.”
c. On May 1, 2021, an investor wrote a check to Feloni for $10,000 with a
memo line stating, “Stock Squirrel Investment.”
d. On February 23, 2022, an investor wrote a check to Feloni for $5,000 with
a memo line stating, “Stock Squirrel Investment.”
e. On May 9, 2022, an investor wrote a check to Feloni for $5,000 with a
memo line stating, “Stock Squirrel Shares.”
f. On January 11, 2023, an investor wrote a check to Feloni for $1,000 with
a memo line stating, “Stock Squirrel Shares.”
30. During the period that Feloni and Stock Squirrel took in investor money, Stock
Squirrel’s finances were fully commingled with Feloni’s personal finances. Stock Squirrel held
no active bank accounts in its own name and did not (and does not) hold any other assets in its
own name.
31. During this period, Feloni and Stock Squirrel did not maintain any records
concerning Stock Squirrel’s financial condition or the expenses paid in the course of Stock
Squirrel’s business, other than Feloni’s personal bank account statements. Feloni and Stock
Squirrel also did not maintain records of the principal or interest that remained outstanding on
the promissory notes issued to investors.

10
32. Of the $2.5 million received from investors, Feloni used approximately $1.6
million for personal living expenses or other expenses with no apparent connection to Stock
Squirrel’s business. For example:
a. Feloni took approximately $1 million through cash withdrawals or by
writing checks made out to himself. Approximately $116,000 of the cash withdrawals
were made at ATMs located at casinos in New Hampshire and Massachusetts.
b. Feloni deposited $287,000 into brokerage accounts in his personal name
that he used to trade stocks and stock options.
c. Feloni paid more than $594,000 for personal living expenses or other
expenses with no apparent connection to Stock Squirrel’s business, including:
i. $92,000 for Feloni’s personal rent;
ii. $111,000 for Feloni’s personal food and dining;
iii. $23,000 for Feloni’s personal liquor store purchases;
iv. $23,000 for Feloni’s personal health care and wellness expenses;
v. $20,000 for Feloni’s personal insurance payments; and
vi. $56,000 for Feloni’s personal retail purchases, including purchases
at stores selling cigars, jewelry, electronics, and sporting goods.

11
IV. Defendants Induced Some Investors to “Roll Over” Their Investments.
33. Beginning on November 13, 2020, Feloni and Stock Squirrel sent emails to
certain investors in order to induce them to “roll over” their promissory notes, thereby
postponing Feloni’s obligation to pay.
34.  The emails contained misleading statements that did not disclose that Feloni had
used the majority of investors’ funds for personal expenses and other payments with no
connection to Stock Squirrel’s business, including:
a. A November 13, 2020 email claiming that Feloni wanted investors to roll
over their promissory notes because “I’m using a lot of cash for the engineering” of the
Stock Squirrel App.
b. A November 17, 2020 email claiming that Feloni wanted investors to roll
over their promissory notes because he claimed to be “in crunch time on the one-yard line
to get the [Stock Squirrel App] launched in January,” emphasizing, “cash is king.”
35. Multiple investors rolled over the promissory notes they received in response to
Feloni’s requests. Some investors who rolled over their promissory notes also received additional
shares of Stock Squirrel stock.
V. Defendants Used Incoming Funds from Later
Investments to Pay to Existing Investors.
36. Feloni and Stock Squirrel used approximately $242,000 of new investor funds to
repay some or all of the principal of approximately 25 existing Stock Squirrel investors who
demanded to be repaid in accordance with the terms of the promissory notes they received.
37. Many of these investor repayments were Ponzi-like in nature. On multiple
occasions, Feloni and Stock Squirrel deposited a check from a new investor into one of Feloni’s
personal bank accounts with a low, and sometimes a zero or negative, balance. He then issued a

12
check from that account shortly thereafter to repay a previous investor in an amount that was
higher than the total balance of the account before the deposit of the new investor’s funds. For
example:
a. On October 24, 2022, Feloni deposited an investor’s check for $10,000
into a bank account in his name with a prior balance of $204.69. One day later he issued a
check for $6,000 to partially repay a previous investor;
b.  On November 4, 2022, Feloni deposited an investor’s check for $25,000
into a bank account in his name with a prior balance of $21.33. Three days later he issued
a check for $4,000 to partially repay a previous investor while also cashing several
checks made out to himself with a total value of $11,500; and
c. On December 9, 2022, Feloni deposited an investor’s check for $15,000
into a bank account in his name with a prior balance of $101.03. Three days later he
issued a check for $6,000 to partially repay a previous investor.
FIRST CLAIM FOR RELIEF
FRAUD IN THE OFFER OR SALE OF SECURITIES
(Violations of Section 17(a) of the Securities Act)
38. The Commission repeats and incorporates by reference the allegations in
Paragraphs 1-37 above as though fully set forth herein.
39. By reason of the foregoing, Defendants, directly or indirectly, acting intentionally,
knowingly, recklessly, or negligently, by use of the means or instruments of transportation or
communication in interstate commerce or by the use of the mails, in the offer or sale of
securities: (a) have employed or are employing devices, schemes, or artifices to defraud; (b) have
obtained money or property by making untrue statements of material fact or omitting material

13
facts necessary to make the statements made not misleading; or (c) have engaged or are engaging
in transactions, practices, or courses of business which operated as a fraud or deceit upon the
purchasers of such securities.
40. By reason of the conduct described above, Defendants have violated, and unless
enjoined will continue to violate, Securities Act Section 17(a) [15 U.S.C. § 77q(a)].
SECOND CLAIM FOR RELIEF
FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES
(Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder)
41. The Commission repeats and incorporates by reference the allegations in
Paragraphs 1-37 above as though fully set forth herein.
42. By reason of the foregoing, Defendants, directly or indirectly, acting intentionally,
knowingly or recklessly, in connection with the purchase or sale of securities, by use of the
means or instrumentalities of interstate commerce or the facilities of a national securities
exchange or the mail: (a) have employed or are employing devices, schemes, or artifices to
defraud; (b) have made or are making untrue statements of material fact or have omitted to state
material fact(s) necessary to make the statements made not misleading; or (c) have engaged or
are engaging in acts, practices, or courses of business which operate as a fraud or deceit upon
certain persons.
43. By engaging in the conduct described above, Defendants have violated, and
unless enjoined will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)]
and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].

14
THIRD CLAIM FOR RELIEF
UNREGISTERED OFFERS AND SALES OF SECURITIES
(Violations of Section 5(a) and 5(c) of the Securities Act)
44. The Commission repeats and incorporates by reference the allegations in
Paragraphs 1-37 above as though fully set forth herein.
45. By virtue of the foregoing, Defendants, directly and indirectly, without a
registration statement in effect as to that security: (a) made use of the means or instruments of
transportation or communications in interstate commerce or of the mails to sell securities through
the use or medium of any prospectus or otherwise; (b) carried or caused to be carried through the
mails or in interstate commerce, by any means or instruments of transportation, any such security
for the purpose of sale or for delivery after sale; and (c) made use of the means and instruments
of transportation or communication in interstate commerce or of the mails to offer to sell through
the use or medium of a prospectus or otherwise, securities as to which no registration statement
had been filed.
46. By their conduct described above, Defendants violated, and unless restrained and
enjoined will continue to violate, Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. § 77e(a)
and 77e(c)].
PRAYER FOR RELIEF
WHEREFORE, the Commission requests that the Court:
A. Enter a permanent injunction restraining Defendants and any persons in active
concert or participation with them who receive actual notice of the injunction by personal service
or otherwise, including facsimile transmission or overnight delivery service, from directly or
indirectly engaging in the conduct described above, or in conduct of a similar purport and effect,

15
in violation of Sections 5(a), 5(c) and 17(a) of the Securities Act [15 U.S.C. §§ 77e(a), e(c), and
q(a)], and Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. §
240.10b-5] thereunder;
B. Enter a permanent injunction restraining Feloni, directly or indirectly, including but
not limited  to  through  any  entity he  owns  or  controls,   from  (i) participating  in  the  issuance,
purchase, offer or sale of any security, or (ii) engaging in activities for purposes of inducing or
attempting to induce the purchase or sale of any security; provided, however, that such injunction
shall not prevent Feloni from purchasing or selling securities for his own personal account;
C. Require  Defendants  to  disgorge  their  ill-gotten  gains,  plus  prejudgment  interest,
pursuant to Exchange Act Sections 21(d)(3), (5), and (7) [15 U.S.C. § 78u(d)(3), (5), (7)];
D. Require Defendants to pay civil monetary penalties pursuant to Section 20(d) of
the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. §
78u(d)(3)];
E. Order that Feloni be prohibited from acting as an officer or director of any public
company pursuant to Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)] and Section 21(d)(2)
of the Exchange Act [15 U.S.C. § 78u(d)(2)];
F. Order that Feloni be barred from participating in any offering of penny stock
pursuant to Section 20(g) of the Securities Act [15 U.S.C. § 77t(g)] and Section 21(d) of the
Exchange Act [15 U.S.C. § 78u(d)];
G. Retain jurisdiction over this action to implement and carry out the terms of all
orders and decrees that may be entered; and
H. Grant such other further relief as the Court may deem just and proper.

16
JURY DEMAND
 The Commission demands a jury in this matter for all claims so triable.
Respectfully submitted,
SECURITIES AND EXCHANGE COMMISSION
By its attorneys,

David H. London (BBO# 638289)
Martin F. Healey (BBO# 227550)
David R. Fox (VSB# 93500)
Boston Regional Office
33 Arch Street, 24th Floor
Boston, MA 02110
(617) 573-8997 (London)
[email protected]

Dated: September 29, 2023

UNITED STATES DISTRICT COURT 
DISTRICT OF MASSACHUSETTS 

 

  
SECURITIES AND EXCHANGE COMMISSION,  

Plaintiff,  

v. Case No. 

JOHN FELONI and 
STOCK SQUIRREL, INC., 

 

Defendants. JURY TRIAL DEMANDED 

  
  

COMPLAINT 

Plaintiff United States Securities and Exchange Commission (“Commission” or “SEC”) 

alleges the following as to defendants John Feloni (“Feloni”) and Stock Squirrel, Inc. (“Stock 

Squirrel” and, collectively with Feloni, “Defendants”): 

SUMMARY 

1. Between at least 2019 and April 2023, Feloni and Stock Squirrel deceived 

approximately 180 retail investors into giving them almost $2.5 million. Feloni and Stock 

Squirrel falsely claimed that they would use investors’ money for Stock Squirrel’s business, 

principally by developing a smartphone application (“Stock Squirrel App”) offering financial 

services to the fast-growing youth sector, and they represented that Feloni would not take a 

salary from Stock Squirrel. Contrary to their representations, Feloni used approximately $1.6 

million of investor funds—66% of the total amount raised from investors—to pay his personal 

expenses and to make other payments with no apparent connection to Stock Squirrel’s business. 

Feloni used the funds he took from Stock Squirrel investors as his primary means of support 

Case 1:23-cv-12233   Document 1   Filed 09/29/23   Page 1 of 16



2 

throughout the duration of his fraudulent scheme. In return for investors’ money, Feloni and 

Stock Squirrel issued both 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. 

2. By engaging in the conduct alleged, Defendants violated, and unless restrained 

and enjoined, will continue to violate, Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 

(the “Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange 

Act”) and Rule 10b-5 thereunder.  

3. Based on these violations, the Commission seeks: (a) permanent injunctions; (b) 

disgorgement of Defendants’ ill-gotten gains, plus prejudgment interest; (c) civil penalties; (d) a 

permanent injunction restraining Feloni, directly or indirectly, including but not limited to 

through any entity he owns or controls, from (i) participating in the issuance, purchase, offer or 

sale of any security, or (ii) engaging in activities for purposes of inducing or attempting to induce 

the purchase or sale of any security; provided, however, that such injunction shall not prevent 

Feloni from purchasing or selling securities for his own personal account; (e) an order barring 

Feloni from participating in any offering of a penny stock; (f) an officer and director bar against 

Feloni; and (g) such other and further relief as the Court deems just and proper.  

JURISDICTION AND VENUE 

4. The Commission brings this action pursuant to the enforcement authority 

conferred upon it by Section 20(b) of the Securities Act [15 U.S.C. § 77t(b)] and Section 21(d) of 

the Exchange Act [15 U.S.C. § 78u(d)]. 

5. The Court has jurisdiction over this action pursuant to Section 22(a) of the 

Securities Act [15 U.S.C. § 77v(a)] and Sections 21(d), 21(e), and 27 of the Exchange Act [15 

U.S.C. §§ 78u(d), 78u(e), 78aa]. 

Case 1:23-cv-12233   Document 1   Filed 09/29/23   Page 2 of 16



3 

6. Venue lies in this District pursuant to Section 22(a) of the Securities Act [15 

U.S.C. § 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 78aa] because a substantial 

part of the acts constituting the alleged violations occurred in Massachusetts, Feloni resides in 

Massachusetts, Stock Squirrel’s principal place of business is in Massachusetts, and Defendants 

transact business in Massachusetts.  

7. In connection with the conduct described in this Complaint, Defendants directly 

or indirectly made use of the mails or the means or instruments of transportation or 

communication in interstate commerce. Feloni communicated by mail, email and telephone with 

multiple investors in Stock Squirrel who reside in states outside Massachusetts.  

8. Defendants’ conduct involved fraud, deceit, or deliberate or reckless disregard of 

regulatory requirements, and resulted in substantial loss, or significant risk of substantial loss, to 

other persons.  

DEFENDANTS 

9. John Feloni, age 64, resides in Somerville, Massachusetts. Feloni is the President 

and CEO of Stock Squirrel and its sole officer and director.  

10. Stock Squirrel, Inc. is a Delaware Corporation with a principal place of business 

in Somerville, Massachusetts. Its principal office is Feloni’s residence. Stock Squirrel and its 

stock are not registered with the Commission in any capacity.  

  

Case 1:23-cv-12233   Document 1   Filed 09/29/23   Page 3 of 16



4 

FACTS 

I. Feloni and Stock Squirrel Solicited Investments From 
Retail Investors in Several States. 

11. From at least 2019 through April 2023, Feloni and Stock Squirrel offered a 

purported investment opportunity to invest in Stock Squirrel’s business, which consisted 

primarily in the development of the Stock Squirrel App to be released to the public. Feloni and 

Stock Squirrel claimed on the website they maintained for Stock Squirrel and in communications 

with investors and potential investors that the Stock Squirrel App’s users would be able to 

purchase fractional shares of stock in public companies when they made purchases from those 

companies’ stores. They claimed on Stock Squirrel’s website that, for example, a user could 

make a $4 purchase at an international coffee roaster chain using a debit card registered with 

Stock Squirrel, and the Stock Squirrel App would automatically purchase forty cents’ worth of 

fractional shares of the coffee company’s public stock. 

12. Feloni and Stock Squirrel solicited approximately 180 investors residing in 

multiple states, including Massachusetts, Rhode Island, Maine, and Texas, via email and in-

person and telephone conversations. Feloni had personal relationships with some but not all of 

the investors.  

13. In exchange for invested funds (typically ranging from $1,000 to $10,000), Feloni 

and Stock Squirrel sent investors two instruments: (i) a promissory note signed by Feloni and (ii) 

shares of Stock Squirrel stock. 

14. The promissory notes typically offered 10% interest payable in six months. The 

promissory notes also typically provided for a different interest rate of between 18 and 24% 

annually on any amounts not paid after the due date. Feloni signed the promissory notes, which 

did not mention Stock Squirrel on their face. 

Case 1:23-cv-12233   Document 1   Filed 09/29/23   Page 4 of 16



5 

15. The amount of stock each investor received was memorialized in a one-page letter 

(the “Stock Letter”) stating, “as of this date you have a total ownership of [a certain number of] 

shares of Stock Squirrel, Inc., a Delaware corporation.” The Stock Letters further stated, 

“Physical shares will be issued to you asap, but in the meantime your ownership is official as of 

today.” The letters were signed by Feloni both in his personal capacity and in his capacity as 

President of Stock Squirrel.  

16. Feloni and Stock Squirrel did not register the offering of Stock Squirrel stock or 

promissory notes with the Commission. In general, Feloni and Stock Squirrel issued Stock 

Squirrel stock to investors at a rate of five million shares per ten thousand dollars invested.  

II. Defendants Falsely Represented That Investor Funds 
Would Be Used to Develop the Stock Squirrel Business. 

17. In communications with investors and potential investors, Feloni described the 

development of Stock Squirrel’s business, including its business operations and expenses. In so 

doing, Feloni expressly or impliedly represented that he would use investors’ funds to further 

develop Stock Squirrel’s business, particularly by developing the Stock Squirrel App. 

18. Feloni and Stock Squirrel fraudulently failed to disclose to investors and potential 

investors, however, that Feloni: (a) intended to use, and in fact used, the majority of investors’ 

funds for personal expenses and other payments with no apparent connection to Stock Squirrel’s 

business, and (b) used money obtained from later investors to pay back earlier investors. Failure 

to disclose these crucial facts rendered Feloni’s and Stock Squirrel’s statements materially false 

and misleading. 

19. Defendants knew, recklessly disregarded, or were negligent in not knowing, that 

Feloni used the majority of investors’ funds to pay for personal expenses and to make other 

payments with no apparent connection to Stock Squirrel’s business. 

Case 1:23-cv-12233   Document 1   Filed 09/29/23   Page 5 of 16



6 

20. Feloni is the sole officer and director of Stock Squirrel and fully controls Stock 

Squirrel. Feloni’s conduct is imputed to Stock Squirrel by virtue of his control over the company. 

21. As described in paragraphs 22 through 27, Defendants made specific false 

representations to investors and potential investors regarding their use of investors’ funds 

purportedly to develop Stock Squirrel. In all of these communications, Defendants fraudulently 

failed to disclose that Feloni used the majority of investors’ funds for personal expenses and 

other payments with no apparent connection to Stock Squirrel’s business. Multiple people made 

investments in Stock Squirrel after receiving these communications.  

22. On June 19, 2020, Feloni and Stock Squirrel sent a series of emails to a list of 

investors and potential investors. The emails described several features Stock Squirrel was 

proposing to implement in the Stock Squirrel App, services it purportedly planned to offer to 

public companies, and multiple public relations, marketing and law firms Stock Squirrel retained 

or planned to retain to develop Stock Squirrel’s business. On July 17, 2020, an investor who 

received this email invested $2,000 in Stock Squirrel. On August 3, 2020, another investor who 

received this email invested $5,000 in Stock Squirrel. 

23. Beginning on June 24, 2020, Feloni and Stock Squirrel sent a series of emails to a 

list of investors and potential investors. The emails attached a document entitled “Stock Squirrel, 

Inc. Executive Summary Overview,” which described Stock Squirrel’s business plan and 

included the following planned expenses: 

a. Building a database of prospective Stock Squirrel App users in order to 

market Stock Squirrel’s services to them; 

b. Marketing efforts such as “Squirrel Fest – an expo on college campuses 

around the country;” 

Case 1:23-cv-12233   Document 1   Filed 09/29/23   Page 6 of 16



7 

c. Retaining several marketing and public relations firms to market Stock 

Squirrel’s products; and 

d. Retaining vendors to develop a “loyalty and reward partner program” to 

offer to public companies. 

On August 14, 2020, an investor who received this email invested $2,500 in Stock Squirrel. 

24. In a July 6, 2020 email to an investor, Feloni claimed, “I’ll be putting a lot of 

money in the tech development.” 

25.  On December 30, 2020, Feloni and Stock Squirrel sent a series of emails to at 

least three investors in which they claimed Stock Squirrel would retain a new customer 

acquisition agency that purportedly had previously worked for a prominent broker-dealer 

catering to young people and that had extensive experience acquiring young customers. On 

January 19, 2021, an investor who received this email invested $1,000 in Stock Squirrel. 

26. On December 17, 2022, Feloni and Stock Squirrel sent a series of emails to a list 

of Stock Squirrel investors and potential investors. In these emails, Feloni and Stock Squirrel 

claimed to have spent considerable time ensuring that the Stock Squirrel App complied with SEC 

and other regulations. The emails further claimed that Stock Squirrel would pursue a number of 

other ventures to develop its business “over the next year or two,” including: 

a. Acquiring a broker-dealer firm; 

b. Acquiring a company that offers “carbon credits” to the public that can be 

used to support environmental sustainability projects; 

c. Developing and offering a range of marketing and investor relations 

services to public companies; 

Case 1:23-cv-12233   Document 1   Filed 09/29/23   Page 7 of 16



8 

d. Offering fractional shares in works of art, real property, private 

companies, and cryptocurrency to investors; 

e. Offering services to facilitate donations to charitable organizations; 

f. Launching the Stock Squirrel App in India; 

g. Opening Stock Squirrel-branded restaurants on college campuses; 

h. Hiring a prominent investor and other “influencers of stature” as Stock 

Squirrel spokespeople; and 

i. Partnering with a company owned by another prominent investor to 

produce investor education videos aimed at schoolchildren. 

On December 19, 2022, an investor who received this email invested $10,000 in Stock Squirrel. 

27. In approximately January 2023, Feloni met in person with a group of investors 

and prospective investors in which he represented that he did not take any salary from Stock 

Squirrel. During this discussion, Feloni continued to represent that investors’ funds would be 

used to develop Stock Squirrel’s business, particularly by developing the Stock Squirrel App. On 

January 23, 2023, an investor who was at this discussion invested $10,000 in Stock Squirrel. 

III. Feloni Misappropriated Investors’ Funds for Personal Use. 

28. From 2019 through April 2023, Feloni and Stock Squirrel raised approximately 

$2.5 million from investors. Feloni also received approximately $350,000 from other sources 

during this period. Most investors made their investments by writing checks payable to Feloni. 

Feloni instructed these investors to make their checks payable personally to him rather than to 

Stock Squirrel. Feloni deposited these checks into his personal bank accounts. Some investors 

also made their investments with cash, which Feloni deposited into his personal bank accounts. 

Other investors made wire transfers directly to Feloni’s personal bank accounts.  

Case 1:23-cv-12233   Document 1   Filed 09/29/23   Page 8 of 16



9 

29. Several investors referenced in the memo line of their checks that their funds were 

for investment in Stock Squirrel. For example: 

a. On March 18, 2021, an investor wrote a check to Feloni for $5,000 with a 

memo line stating, “Stock Squirrel 2.5m shares common stock.” 

b. On March 26, 2021, an investor wrote a check to Feloni for $5,000 with a 

memo line stating, “Stock Squirrel common stock 2.5m shares.” 

c. On May 1, 2021, an investor wrote a check to Feloni for $10,000 with a 

memo line stating, “Stock Squirrel Investment.” 

d. On February 23, 2022, an investor wrote a check to Feloni for $5,000 with 

a memo line stating, “Stock Squirrel Investment.” 

e. On May 9, 2022, an investor wrote a check to Feloni for $5,000 with a 

memo line stating, “Stock Squirrel Shares.” 

f. On January 11, 2023, an investor wrote a check to Feloni for $1,000 with 

a memo line stating, “Stock Squirrel Shares.” 

30. During the period that Feloni and Stock Squirrel took in investor money, Stock 

Squirrel’s finances were fully commingled with Feloni’s personal finances. Stock Squirrel held 

no active bank accounts in its own name and did not (and does not) hold any other assets in its 

own name. 

31. During this period, Feloni and Stock Squirrel did not maintain any records 

concerning Stock Squirrel’s financial condition or the expenses paid in the course of Stock 

Squirrel’s business, other than Feloni’s personal bank account statements. Feloni and Stock 

Squirrel also did not maintain records of the principal or interest that remained outstanding on 

the promissory notes issued to investors.  

Case 1:23-cv-12233   Document 1   Filed 09/29/23   Page 9 of 16



10 

32. Of the $2.5 million received from investors, Feloni used approximately $1.6 

million for personal living expenses or other expenses with no apparent connection to Stock 

Squirrel’s business. For example:  

a. Feloni took approximately $1 million through cash withdrawals or by 

writing checks made out to himself. Approximately $116,000 of the cash withdrawals 

were made at ATMs located at casinos in New Hampshire and Massachusetts.  

b. Feloni deposited $287,000 into brokerage accounts in his personal name 

that he used to trade stocks and stock options. 

c. Feloni paid more than $594,000 for personal living expenses or other 

expenses with no apparent connection to Stock Squirrel’s business, including: 

i. $92,000 for Feloni’s personal rent; 

ii. $111,000 for Feloni’s personal food and dining; 

iii. $23,000 for Feloni’s personal liquor store purchases; 

iv. $23,000 for Feloni’s personal health care and wellness expenses; 

v. $20,000 for Feloni’s personal insurance payments; and 

vi. $56,000 for Feloni’s personal retail purchases, including purchases 

at stores selling cigars, jewelry, electronics, and sporting goods. 

  

Case 1:23-cv-12233   Document 1   Filed 09/29/23   Page 10 of 16



11 

IV. Defendants Induced Some Investors to “Roll Over” Their Investments. 

33. Beginning on November 13, 2020, Feloni and Stock Squirrel sent emails to 

certain investors in order to induce them to “roll over” their promissory notes, thereby 

postponing Feloni’s obligation to pay.  

34.  The emails contained misleading statements that did not disclose that Feloni had 

used the majority of investors’ funds for personal expenses and other payments with no 

connection to Stock Squirrel’s business, including: 

a. A November 13, 2020 email claiming that Feloni wanted investors to roll 

over their promissory notes because “I’m using a lot of cash for the engineering” of the 

Stock Squirrel App.  

b. A November 17, 2020 email claiming that Feloni wanted investors to roll 

over their promissory notes because he claimed to be “in crunch time on the one-yard line 

to get the [Stock Squirrel App] launched in January,” emphasizing, “cash is king.”  

35. Multiple investors rolled over the promissory notes they received in response to 

Feloni’s requests. Some investors who rolled over their promissory notes also received additional 

shares of Stock Squirrel stock.  

V. Defendants Used Incoming Funds from Later 
Investments to Pay to Existing Investors. 

36. Feloni and Stock Squirrel used approximately $242,000 of new investor funds to 

repay some or all of the principal of approximately 25 existing Stock Squirrel investors who 

demanded to be repaid in accordance with the terms of the promissory notes they received. 

37. Many of these investor repayments were Ponzi-like in nature. On multiple 

occasions, Feloni and Stock Squirrel deposited a check from a new investor into one of Feloni’s 

personal bank accounts with a low, and sometimes a zero or negative, balance. He then issued a 

Case 1:23-cv-12233   Document 1   Filed 09/29/23   Page 11 of 16



12 

check from that account shortly thereafter to repay a previous investor in an amount that was 

higher than the total balance of the account before the deposit of the new investor’s funds. For 

example: 

a. On October 24, 2022, Feloni deposited an investor’s check for $10,000 

into a bank account in his name with a prior balance of $204.69. One day later he issued a 

check for $6,000 to partially repay a previous investor; 

b.  On November 4, 2022, Feloni deposited an investor’s check for $25,000 

into a bank account in his name with a prior balance of $21.33. Three days later he issued 

a check for $4,000 to partially repay a previous investor while also cashing several 

checks made out to himself with a total value of $11,500; and 

c. On December 9, 2022, Feloni deposited an investor’s check for $15,000 

into a bank account in his name with a prior balance of $101.03. Three days later he 

issued a check for $6,000 to partially repay a previous investor. 

FIRST CLAIM FOR RELIEF 

FRAUD IN THE OFFER OR SALE OF SECURITIES 

(Violations of Section 17(a) of the Securities Act) 

38. The Commission repeats and incorporates by reference the allegations in 

Paragraphs 1-37 above as though fully set forth herein. 

39. By reason of the foregoing, Defendants, directly or indirectly, acting intentionally, 

knowingly, recklessly, or negligently, by use of the means or instruments of transportation or 

communication in interstate commerce or by the use of the mails, in the offer or sale of 

securities: (a) have employed or are employing devices, schemes, or artifices to defraud; (b) have 

obtained money or property by making untrue statements of material fact or omitting material 

Case 1:23-cv-12233   Document 1   Filed 09/29/23   Page 12 of 16



13 

facts necessary to make the statements made not misleading; or (c) have engaged or are engaging 

in transactions, practices, or courses of business which operated as a fraud or deceit upon the 

purchasers of such securities. 

40. By reason of the conduct described above, Defendants have violated, and unless 

enjoined will continue to violate, Securities Act Section 17(a) [15 U.S.C. § 77q(a)]. 

SECOND CLAIM FOR RELIEF 

FRAUD IN CONNECTION WITH THE PURCHASE OR SALE OF SECURITIES 

(Violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder) 

41. The Commission repeats and incorporates by reference the allegations in 

Paragraphs 1-37 above as though fully set forth herein. 

42. By reason of the foregoing, Defendants, directly or indirectly, acting intentionally, 

knowingly or recklessly, in connection with the purchase or sale of securities, by use of the 

means or instrumentalities of interstate commerce or the facilities of a national securities 

exchange or the mail: (a) have employed or are employing devices, schemes, or artifices to 

defraud; (b) have made or are making untrue statements of material fact or have omitted to state 

material fact(s) necessary to make the statements made not misleading; or (c) have engaged or 

are engaging in acts, practices, or courses of business which operate as a fraud or deceit upon 

certain persons. 

43. By engaging in the conduct described above, Defendants have violated, and 

unless enjoined will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] 

and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

  

Case 1:23-cv-12233   Document 1   Filed 09/29/23   Page 13 of 16



14 

THIRD CLAIM FOR RELIEF 

UNREGISTERED OFFERS AND SALES OF SECURITIES 

(Violations of Section 5(a) and 5(c) of the Securities Act) 

44. The Commission repeats and incorporates by reference the allegations in 

Paragraphs 1-37 above as though fully set forth herein. 

45. By virtue of the foregoing, Defendants, directly and indirectly, without a 

registration statement in effect as to that security: (a) made use of the means or instruments of 

transportation or communications in interstate commerce or of the mails to sell securities through 

the use or medium of any prospectus or otherwise; (b) carried or caused to be carried through the 

mails or in interstate commerce, by any means or instruments of transportation, any such security 

for the purpose of sale or for delivery after sale; and (c) made use of the means and instruments 

of transportation or communication in interstate commerce or of the mails to offer to sell through 

the use or medium of a prospectus or otherwise, securities as to which no registration statement 

had been filed. 

46. By their conduct described above, Defendants violated, and unless restrained and 

enjoined will continue to violate, Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. § 77e(a) 

and 77e(c)]. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission requests that the Court: 

A. Enter a permanent injunction restraining Defendants and any persons in active 

concert or participation with them who receive actual notice of the injunction by personal service 

or otherwise, including facsimile transmission or overnight delivery service, from directly or 

indirectly engaging in the conduct described above, or in conduct of a similar purport and effect, 

Case 1:23-cv-12233   Document 1   Filed 09/29/23   Page 14 of 16



15 

in violation of Sections 5(a), 5(c) and 17(a) of the Securities Act [15 U.S.C. §§ 77e(a), e(c), and 

q(a)], and Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. § 

240.10b-5] thereunder; 

B. Enter a permanent injunction restraining Feloni, directly or indirectly, including but 

not limited to through any entity he owns or controls, from (i) participating in the issuance, 

purchase, offer or sale of any security, or (ii) engaging in activities for purposes of inducing or 

attempting to induce the purchase or sale of any security; provided, however, that such injunction 

shall not prevent Feloni from purchasing or selling securities for his own personal account; 

C. Require Defendants to disgorge their ill-gotten gains, plus prejudgment interest, 

pursuant to Exchange Act Sections 21(d)(3), (5), and (7) [15 U.S.C. § 78u(d)(3), (5), (7)];  

D. Require Defendants to pay civil monetary penalties pursuant to Section 20(d) of 

the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 

78u(d)(3)]; 

E. Order that Feloni be prohibited from acting as an officer or director of any public 

company pursuant to Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)] and Section 21(d)(2) 

of the Exchange Act [15 U.S.C. § 78u(d)(2)];  

F. Order that Feloni be barred from participating in any offering of penny stock 

pursuant to Section 20(g) of the Securities Act [15 U.S.C. § 77t(g)] and Section 21(d) of the 

Exchange Act [15 U.S.C. § 78u(d)];  

G. Retain jurisdiction over this action to implement and carry out the terms of all 

orders and decrees that may be entered; and 

H. Grant such other further relief as the Court may deem just and proper. 

  

Case 1:23-cv-12233   Document 1   Filed 09/29/23   Page 15 of 16



16 

JURY DEMAND 

 The Commission demands a jury in this matter for all claims so triable.  

Respectfully submitted, 

SECURITIES AND EXCHANGE COMMISSION 

By its attorneys, 

 
David H. London (BBO# 638289) 
Martin F. Healey (BBO# 227550) 
David R. Fox (VSB# 93500) 
Boston Regional Office 
33 Arch Street, 24th Floor 
Boston, MA 02110 
(617) 573-8997 (London) 
[email protected] 

 
Dated: September 29, 2023 

Case 1:23-cv-12233   Document 1   Filed 09/29/23   Page 16 of 16