SEC v. MICHAEL CARIDI, No. 1:23-cv-1243, District of Connecticut (Sept. 25, 2023) — Complaint

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT

SECURITIES AND EXCHANGE
COMMISSION,

                                             Plaintiff,

                        -against-

MICHAEL CARIDI,

                                             Defendant.

COMPLAINT

23 Civ. 1243

JURY TRIAL DEMANDED

Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against
Michael Caridi (“Caridi” or “Defendant”), alleges as follows:
SUMMARY
1. This action arises out of a fraudulent scheme by Caridi, the former chairman and
chief executive of Tree of Knowledge International, Inc. (“TOKI”), to hide from investors that
TOKI and its subsidiary, Tree of Knowledge Inc. (“TOK NV,” together with TOKI, the “TOK
Entities”), had failed to meet their obligations in the largest transaction in the TOK Entities’
history, that Caridi had misappropriated substantial sums from that transaction, and that, due to
the TOK Entities’ failure in that transaction, they now faced a liability that dwarfed their assets
and revenues.
2. At the end of March 2020, at the outset of the Covid-19 pandemic, Caridi misled
a third-party hospital to believe that the TOK Entities—which were unprofitable companies that
operated three pain management clinics and sold hemp-based cannabidiol (“CBD”) products—
had a vast international network of medical equipment suppliers through which the TOK Entities
could immediately procure millions of N-95 respirator masks that the hospital desperately
needed to protect its employees.  The hospital paid the TOK Entities nearly $13.7 million, more

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than double the total revenue TOKI had ever earned, for three million N-95 masks to be
delivered within two days.
3. Caridi and the TOK Entities ultimately procured zero N-95 masks for the hospital.
Instead, Caridi paid a substantial portion of the more than $13 million received from the hospital
to himself, his family, and his business associates.  When no N-95 masks were delivered and the
hospital demanded repayment, Caridi promised the TOK Entities would repay the hospital in
full.  They did not.  As a result, the TOK Entities were left with a massive liability owed to the
hospital, and insufficient assets or revenues to make repayment.
4. Caridi kept this scheme—the transaction, its failure, and his self-dealing—hidden
from the TOK Entities’ other senior management and board members.  And those material facts
were not disclosed to investors.  Instead, weeks later, in May and June 2020, TOKI, with
Caridi’s assistance, issued two press releases touting two small transactions in which the TOK
Entities had procured thermometers and medical gowns for third parties.  The press releases
falsely and misleadingly portrayed the TOK Entities as having made a successful “pivot” to a
new and valuable strategy of procuring personal protective medical equipment (“PPE”) for
hospitals and other medical purchasers, quoted Caridi as lauding the TOK Entities for
overcoming obstacles to procuring PPE in the Covid-19 environment, and assured investors that
no material undisclosed events had occurred at TOKI.  Neither press release said anything about
the massive, failed N-95 mask transaction or the financial fallout from that failure.
5. In truth, contrary to the press releases, the undisclosed, failed attempt by Caridi
and the TOK Entities to pivot to the PPE procurement business had already resulted in the TOK
Entities owing the hospital millions of dollars that they could not repay and created a massive,
hidden liability for the TOK Entities that one of TOKI’s board members would later describe as

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“cataclysmic.”  Indeed, due to the undisclosed failed transaction, a court later placed TOK NV
into receivership, TOKI eventually handed over ownership of that subsidiary and its assets and
claims to the hospital, and Caridi was forced to resign.
6. By virtue of this conduct, and as alleged herein, Caridi violated Section 10(b) of
the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)], and Rule 10b-5
thereunder [17 C.F.R. § 240.10b-5], both as a primary violator and by aiding and abetting
TOKI’s violations of Section 10(b) of the Exchange Act and Rule 10b-5(b) thereunder.  The
Commission asks the Court to enjoin Caridi from future securities law violations, require him to
disgorge ill-gotten gains together with prejudgment interest, require him to pay a civil penalty,
bar him from serving as an officer or director of a public company, and bar him from dealing in
penny stocks.
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
7. The Commission brings this action pursuant to the authority conferred upon it by
Exchange Act Section 21(d) [15 U.S.C. § 78u(d)].
8. The Commission seeks a final judgment (a) permanently enjoining Caridi from
violating the federal securities laws alleged herein; (b) ordering Caridi to disgorge all ill-gotten
gains he has received as a result of the violations alleged herein pursuant to Exchange Act
Sections 21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(5) and 78u(d)(7)] and to pay prejudgment
interest thereon; (c) ordering Caridi to pay civil money penalties pursuant to Exchange Act
Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; (d) permanently prohibiting Caridi from serving as an
officer or director that has a class of securities registered under Exchange Act Section 12
[15 U.S.C. § 78l] or that is required to file reports under Exchange Act Section 15(d) [15 U.S.C.
§ 78o(d)], pursuant to Exchange Act Section 12(d)(2) [15 U.S.C. § 78u(d)(2)]; (e) permanently

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prohibiting Caridi from participating in an offering of any penny stock, pursuant to Section
21(d)(6) of the Exchange Act [15 U.S.C. § 78u(d)(6)]; and (f) any other and further relief the
Court may deem just and appropriate.
JURISDICTION AND VENUE
9. This Court has jurisdiction pursuant to Sections 21(d) and 27 of the Exchange Act
[15 U.S.C. §§ 78u(d) and 78aa].  Defendant, directly and indirectly, made use of the mails, or the
means and instrumentalities of interstate commerce, in connection with the transactions, acts,
practices, and courses of business alleged herein.
10. Venue lies in this District under Section 27 of the Exchange Act [15 U.S.C.
§ 78aa].  Certain of the acts, practices, transactions, and courses of business alleged in this
Complaint occurred within this District.  Among other things, Caridi resides in this District and
conducted business for the TOKI Entities, including conduct described herein, in and from this
District.
DEFENDANT
11. Michael Caridi, age 59, is a resident of Greenwich, Connecticut.  During the
relevant period, Caridi served as chairman of the TOKI Board of Directors and, until April 28,
2020, as TOKI’s interim chief executive officer.  Caridi also served as the President and a
director of TOK NV.  In February 2021, Caridi resigned as President and director of TOK NV
and, in September 2021, resigned from TOKI’s Board of Directors.  Also during the relevant
period, Caridi was one of TOKI’s largest shareholders, owning more than 10 million TOKI
shares.  During the Commission’s investigation concerning Caridi’s potential securities law
violations that preceded this action, including the violations alleged herein, Caridi asserted his
Fifth Amendment right against self-incrimination and, on that basis, refused to provide testimony
or to produce documents or other materials in response to Commission investigative subpoenas.

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RELEVANT NON-PARTIES
12. Tree of Knowledge Inc. (“TOK NV”) was formed in 2015 under the laws of
Nevada, with its principal place of business in Spokane, Washington.  During the relevant
period, TOK NV was a subsidiary of TOKI, and TOK NV produced and sold hemp-based CBD
products.
13. Tree of Knowledge International Corp. (“TOKI”) was formed in 2018 under
the laws of British Columbia, through a reverse merger between TOK NV and a publicly traded
shell company, Courtland Capital, Inc.  TOKI has its principal place of business in Toronto,
Canada, and it operates pain management clinics and produces and distributes hemp-based CBD
products.  During the relevant period, TOKI’s shares were publicly listed on the Canadian
Securities Exchange (“CSE”) under the symbol “TOKI” and they were quoted under the symbol
“TOKIF” on OTC Link (formerly known as the “Pink Sheets”), an electronic interdealer
quotation system in the United States operated by OTC Markets Group, Inc. (“OTC Markets”).
Also during the relevant period, TOKI reported its financial results on a consolidated basis,
reflecting the performance of both TOKI and its subsidiaries, including TOK NV.  After Caridi’s
fraudulent scheme alleged herein was revealed, TOKI changed its name to Optima Medical
Innovations Corp.  At all relevant times, TOKI’s stock was a “penny stock” as that term is
defined in Section 3(a)(51) of the Exchange Act [15 U.S.C. § 78c(a)(51)], and Rule 3a51-1
thereunder [17 C.F.R. § 240.3a51-1].
14. Hospital A is a non-profit entity that is a large, specialized care hospital in
Québec, Canada.
DEFENDANT’S FRAUDULENT SCHEME
15. Caridi engaged in a fraudulent scheme to hide from investors the TOK Entities’
failure to meet their obligations in the largest transaction the companies had ever done, and that

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Caridi had used payments to the TOK Entities in that transaction to enrich himself, his family,
and his business associates, ultimately leaving the TOK Entities with a massive, undisclosed
liability while, at the same time, assisting TOKI in making, or making himself, false and
misleading public disclosures that portrayed the TOK Entities as having made a successful pivot
to the PPE procurement business.
I. Caridi Attempts to Take Advantage of
Hospital A’s Urgent Need for N-95 Masks.
16. Between 2018 and early 2020, TOKI and its subsidiaries operated three pain
management clinics and sold hemp-based CBD products.  TOKI was not profitable.  For 2018
and 2019 combined, TOKI earned approximately $6 million in revenue but incurred losses of
more than $33 million.  By the end of 2019, TOKI had only $63,432 in cash.
17. By mid-March 2020, at the outset of the COVID-19 pandemic, it was widely
reported that many healthcare providers faced shortages of PPE.  At that time, neither of the
TOK Entities had any experience procuring PPE for sale and distribution.  Nonetheless, Caridi,
who also had no experience in PPE procurement, sought to capitalize on the healthcare
providers’ desperate need.
18. On or around March 18, 2020, Caridi informed one of his personal business
associates (“Consultant”) that he would like to enter the PPE procurement business.  On March
25, 2020, Consultant informed Caridi that a large Québec hospital, Hospital A, was looking to
make an urgent PPE purchase.  That evening, on Caridi’s behalf, Consultant informed
Hospital A that Caridi and the TOK Entities could procure large quantities of KN-95 masks.
Hospital A responded that it would only purchase N-95 masks.
19. N-95 masks are materially different from KN-95 masks.  For example, N-95
masks are regulated by the CDC’s National Institute of Occupational Safety and Health and had

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been approved for use in Canadian hospitals, but KN-95 masks are not similarly regulated and
had not received similar approval for use in Canadian hospitals.
20. The next day, March 26, 2020, Caridi offered, on behalf of the TOK Entities, to
procure three million N-95 masks for Hospital A and to deliver them within two days, by March
28, in exchange for $11.9 million, plus fees and taxes.  Hospital A accepted the offer.  That
evening, Caridi caused TOKI to issue two invoices to Hospital A totaling $13,693,522, inclusive
of fees and Québec sales tax, for “Urgent Delivery of Masks.”
21. On March 27, 2020, Hospital A wired $13,693,522 to a U.S.-based bank account
in the name of TOK NV controlled by Caridi.  Before receiving those funds, TOK NV’s bank
accounts held approximately $7,301, and the TOK Entities’ bank accounts held approximately
$200,000.
22. Caridi’s transaction with Hospital A was the largest the TOK Entities had ever
done.  Indeed, the approximately $13.7 million paid by Hospital A to TOK NV was more than
double the total revenue TOKI had earned since it had been in existence.
23. Despite the size of the Hospital A transaction and the substantial importance of
the deal to the TOK Entities’ business, Caridi did not inform the TOK Entities’ other senior
management or its Board of Directors that the TOK Entities had contracted with Hospital A to
procure N-95 masks or that Hospital A had transferred nearly $13.7 million to TOK NV in
payment for those masks.
II. Caridi Fails to Procure Any N-95 Masks, But Disburses Nearly All
of the Nearly $13.7 Million TOK NV Had Been Paid By Hospital A.
24. The TOK Entities never delivered any N-95 masks to Hospital A.  Nevertheless,
Caridi disbursed nearly all funds Hospital A had paid to TOK NV—including making substantial

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payments to himself and his family—leaving the TOK Entities owing an undisclosed liability to
Hospital A that was so large as to put their operations at risk.
a. The TOK Entities Delivered Zero N-95 Masks to Hospital A
and the Non-N-95 Masks They Delivered Were Unusable
25. On March 28, 2020, the day the TOK Entities were due to deliver three million
N-95 masks to Hospital A, Caridi caused TOKI to enter a contract to procure masks.  That
contract, with a United States-based CBD products company that had no experience procuring
PPE and that was owned by another of Caridi’s personal business associates (“Company B”),
provided that Company B would sell three million masks to TOKI.  The contract described those
masks as both KN-95 masks and N-95 masks and did not provide a time by which Company B
would complete delivery.  The contract stated only that an “initial shipment” of 100,000 masks
from China would be initiated on March 29, 2020.
26. The next day, March 29, 2020, Caridi sent Hospital A what appeared to be a
screenshot of a shipping manifest purporting that 100,000 KN-95 masks were to be sent from
China to Québec.  Hospital A quickly reminded Caridi that the KN-95 masks were not the same
as, and were not a suitable replacement for, the N-95 masks Hospital A had ordered and paid for.
27. Even though Caridi knew TOKI’s contract with Company B contemplated that
KN-95 masks might be delivered, Caridi told Hospital A that the 100,000 masks referenced in
the screenshot of the shipping manifest were, in fact, N-95 masks and that the manifest was
intentionally incorrect to help the masks clear customs in China.  Caridi’s statement to
Hospital A was false, as Caridi knew or recklessly disregarded.
28. By April 4, 2020, a week after Hospital A had placed its order, the TOK Entities
had delivered zero masks to Hospital A, and Hospital A had concluded that whatever masks the

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TOK Entities had in transit were KN-95 masks.  Hospital A again stressed to Caridi that it had
purchased and paid for N-95 masks and that KN-95 masks were unacceptable.
29. Caridi knew, or recklessly disregarded, that he had failed to procure any N-95
masks.  He also knew, or recklessly disregarded, that Hospital A was poised to reject the KN-95
masks.  So, Caridi made misrepresentations to Hospital A concerning the adequacy of the KN-95
masks to attempt to pass them off as acceptable.  Caridi told Hospital A that KN-95 masks were
regulated and approved by South Korea’s Ministry of Food and Drug Safety.  This was not true.
Caridi also told Hospital A that KN-95 masks were now acceptable for use in Canadian hospitals
and that those masks “meet or exceed” the regulatory standards applicable to N-95 masks.
Hospital A understood those statements to be false.
30. The TOK Entities finally made their first delivery to Hospital A on April 9, 2020:
2,000 KN-95 masks.  On April 13, the TOK Entities delivered an additional 154,000 KN-95
masks.  The packaging for all KN-95 masks the TOK Entities had delivered expressly stated that
the masks were for “Non medical use.”
31. Around the same time, Hospital A discovered that the TOK Entities had no
Canadian tax identification number.  As such, the TOK Entities had not been entitled to collect
the $1,188,022 in Québec sales tax that TOKI had invoiced to Hospital A and that Hospital A
had paid to TOK NV.  Hospital A demanded that the TOK Entities refund that sales tax.  Caridi
repeatedly promised Hospital A that the TOK Entities would repay the full amount of wrongly
collected tax, but the TOK Entities repaid only $500,000.
32. On April 14, 2020, Caridi informed Hospital A that between 240,000 and 400,000
additional masks would be delivered that afternoon.  In response, the Assistant Deputy Minister
for Québec’s Ministry of Health and Social Services e-mailed Caridi, stating that the TOK

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Entities had failed to deliver what Hospital A had ordered and paid for; that, after April 14,
Hospital A would not accept any deliveries “until we are able to validate the quality of the masks
you’ve sent us”; and that Hospital A would test the quality of the KN-95 masks “to see if
something could be salvaged out of this whole mess.”
33. The TOK Entities delivered no additional masks to Hospital A on or after
April 14.
34. The next week, a third-party health and safety research laboratory tested samples
from the 156,000 KN-95 masks the TOK Entities had delivered to Hospital A.  In a report
analyzing the KN-95 masks, the laboratory concluded that the masks were “significantly” less
protective than a basic surgical mask—which, in turn, is less protective than an N-95 mask—and
that the “masks are not Respiratory Protection Devices (RPD).  They cannot and should not be
used as respiratory protection for medical personnel treating patients with COVID-19 or any
other disease that can be spread by airborne transmission.”
35. By April 23, 2020, Hospital A believed Caridi had lied about the TOK Entities’
ability to deliver N-95 masks and demanded that the TOK Entities repay it approximately $13.19
million.
1
  Caridi knew, or recklessly disregarded, that the Hospital A transaction, and his attempt
to pivot the TOK Entities into the PPE procurement business, had been a failure, and he
promised Hospital A he would submit a reimbursement proposal.
36. After multiple communications with Hospital A, including with Hospital A’s
outside counsel, Caridi agreed, on May 1, 2020, that the TOK Entities would repay $13,193,503
to Hospital A pursuant to a payment plan (the “Repayment Agreement”):  first, by May 2, the

1
 The purchase price of $13,693,522 minus the $500,000 in improperly collected taxes that the
TOK Entities had repaid to Hospital A on April 13, 2020, see supra paragraph 31.

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TOK Entities would pay “the sum of $1,000,000 USD, as partial repayment”; and, second, the
TOK Entities would “make minimum payments of $1,000,000 USD and more if possible, every
10 calendar days starting May 4
th
, 2020” until the full amount was repaid.
37. As discussed below, when Caridi agreed to the Repayment Agreement, he knew,
or recklessly disregarded, that he had already caused TOK NV to disburse most of the funds
Hospital A had paid and that the TOK Entities did not have sufficient assets or revenues to make
repayment.
38. Despite the TOK Entities’ inability to procure PPE for Hospital A, their failure to
meet their obligations in a transaction in which Caridi had bound the TOK Entities to deliver
$13 million worth of goods, and the massive debt the TOK Entities now owed to Hospital A
which threatened their very existence, Caridi still did not inform the TOK Entities’ other senior
management or board members of all material details regarding the Hospital A transaction or that
he had agreed to the Repayment Agreement.
b. Caridi Caused the TOK Entities to Disburse More Than $8 Million,
Including to Himself, His Family, and His Business Partners
39. Between March 28, 2020, when Hospital A paid $13,693,522 to TOK NV’s bank
account, and May 1, 2020, when Caridi agreed to the Repayment Agreement, Caridi knowingly,
or with reckless disregard, caused TOK NV to transfer nearly $6 million to persons and entities
other than Hospital A, including payments to himself, his family, and his business associates.
40. For example, between April 1 and April 20, 2020, Caridi caused TOK NV to
make seven payments to himself totaling $953,500.  By contrast, in the three months prior to
those seven payments, TOK NV had paid Caridi a total of only $9,312.
41. Between April 10 and April 17, 2020, Caridi also caused TOK NV to make six
payments to his son totaling $26,000.

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42. During the first three weeks of April 2020, Caridi also knowingly, or with
reckless disregard, caused TOK NV to make more than $4 million in payments to entities owned
by Caridi’s business partners in other ventures.  This included, among other payments:
a. $744,001 to a company owned by the Consultant, who had informed
Caridi that Hospital A was looking to purchase PPE;
b. $920,000 to Company B, with which the TOK Entities had contracted to
acquire masks;
2

c. more than $1.6 million to Company C, an entity owned by an individual
with whom Caridi is involved in a business venture unrelated to the TOK
Entities and who is also an associate of the owner of Company B; and
d. $900,000 to yet another entity owned by the owner of Company C.
43. As of May 1, 2020, when Caridi agreed to the Repayment Agreement obligating
the TOK Entities to repay more than $13 million to Hospital A, the TOK Entities had
approximately $5.3 million, and Caridi knew, or recklessly disregarded, that the TOK Entities
did not have sufficient assets or revenues to repay Hospital A under the Repayment Agreement.
44. Unsurprisingly, the TOK Entities quickly defaulted on the Repayment
Agreement.  The TOK Entities were obligated to pay $1 million to Hospital A on May 2, 2020,
and then to pay at least $1 million to Hospital A every ten days beginning on May 4, until the
full approximately $13.19 million was repaid.  However, they paid only $2 million to
Hospital A:  $1 million on May 4, $500,000 on May 14, and $500,000 on May 15.  Then, Caridi

2
 On the same day as Caridi caused TOK NV to make this $920,000 payment to Company B,
Company B wired $30,000 of that payment to Caridi’s personal bank account in what appears to
be a kickback related to the Hospital A deal.

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stopped causing the TOK Entities to make any repayment to Hospital A.  And the TOK Entities
were left owing more than $11.19 million.
3

45. Even after Caridi agreed to the Repayment Agreement, and despite that
essentially all money held by TOK NV was money it had received from Hospital A, Caridi
knowingly, or with reckless disregard, continued to cause TOK NV to make substantial
payments of that money to persons and entities other than Hospital A, including to himself, his
family, and his business associates.
46. Between May 1 and May 21, 2020, Caridi caused TOK NV to transfer more than
$2.5 million to persons and entities other than Hospital A, including, among other payments:
(a) two payments to himself totaling $169,822; (b) three payments to his son totaling $44,912;
(c) a payment of $45,000 to the Consultant’s company; and (d) payments of at least $1 million
purportedly for TOKI’s “business expenses” and to purchase medical thermometers, gloves, and
gowns that the TOK Entities intended to sell to third parties other than Hospital A.
47. By May 22, 2020, the TOK Entities had less than $2.5 million.
48. Even then, when the TOK Entities were in default on the Repayment Agreement
and lacked the ability to repay their debt to Hospital A, Caridi did not disclose to the TOK
Entities’ other senior management and board members all material details regarding the
Hospital A deal, the Repayment Agreement, and the TOK Entities’ liability from their failure to
make repayment to Hospital A.  Instead, he attempted to cover up his failure, and to put off the

3
 In connection with the Repayment Agreement, Caridi also told Hospital A that the TOKI
Entities would provide a sample of N-97 masks that the TOKI Entities had procured and that, if
acceptable to Hospital A, they would deliver some number of those masks to Hospital A to offset
a portion of the debt owed.  The TOKI Entities never provided any sample of N-97 masks.

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day of reckoning, by causing TOKI to make multiple misrepresentations to investors about the
state of its business.
III. Caridi Makes, and Assists TOKI in Making, Materially Misleading
Statements Regarding the TOK Entities’ Business and Financial Condition.
49. Between mid-May and early June 2020, TOKI, under Caridi’s direction, issued
two press releases (“TOKI Press Releases”) through a business newswire service, on its own
website, and on the websites for the CSE and OTC Markets, that touted the TOK Entities’
supposed success in pivoting to the PPE procurement business and overcoming the difficulties of
obtaining PPE in the Covid-19 environment, and that assured investors of TOKI’s purported
stable financial condition.  The TOKI Press Releases were false and misleading.
50. Moreover, neither of the TOKI Press Releases said anything about the Hospital A
deal; that the TOK Entities had failed to procure PPE in the largest transaction in the companies’
history; that, due to their failure to procure PPE for Hospital A and, subsequently, to make
repayment to Hospital A, they now owed Hospital A more than $11 million; that they lacked
funds to make repayment; or that, due to the debt owed to Hospital A, the TOK Entities might
not continue as a going concern—events that another TOKI board member would later describe
as “cataclysmic.”  Nor did either of the TOKI Press Releases disclose that Caridi had personally
profited from the Hospital A deal.
51. As TOKI’s chairman, Caridi was a member of TOKI’s informal corporate
disclosure committee and was involved in all aspects of TOKI’s public disclosures.  This
included preparing, reviewing, editing, and approving TOKI’s press releases, particularly where,
as with the TOKI Press Releases, the disclosures concerned information about TOKI’s
operations.  Caridi also provided quotes for each of the TOKI Press Releases.

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52. Rather than using his role in TOKI’s disclosure process to ensure that investors
were made aware of all material details of the most important contract and most significant
failure in the TOK Entities’ history, which could be ruinous to TOKI, Caridi knowingly, or
recklessly, used the TOKI Press Releases as an opportunity to mislead investors with lies about
how TOKI was thriving in the face of the Covid-19 pandemic with new business deals and
enduring financial stability.
a. TOKI’s First False and Misleading Press Release
53. In early May 2020, Caridi caused the TOK Entities to contract to procure
thermometers for a purchaser in the United States.  The TOK Entities’ sales invoices for the
thermometer transaction were less than ten percent of the Hospital A deal.  TOKI issued a press
release touting the thermometer transaction as evidence of TOKI’s successful pivot into a new
and valuable PPE procurement business, signaling that TOKI had effected a winning strategy to
capitalize on the demands of the Covid-19 pandemic (the “First Press Release”).
54. With Caridi’s assistance, TOKI issued the First Press Release on the morning of
May 22, 2020.  Consistent with Caridi’s role in TOKI’s disclosure process, the First Press
Release was provided to Caridi in draft form before its publication.
55. The First Press Release announced “the completion of an order of 23,000
thermometers to a healthcare distributor in Chicago, IL, facilitated by TOKI management.  This
marks the Company’s first medical equipment supply transaction into the United States.”
The First Press release then quoted Caridi as saying, “TOKI is proud to be on the forefront of
this fight against COVID-19.  We will continue to leverage our network to provide the US and
Canada the critical PPE supply necessary during these trying times.”

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56. Next, the First Press Release stated,
The Company’s US division, [TOK NV], has made a pivot during these
uncertain times to leverage its medical contacts and international
relationships to procure medical equipment and personal protective
equipment (PPE) to governments, municipalities, and healthcare
distributors in Canada and the US.
This was false and misleading.  In the context of the First Press Release—which touted the TOK
Entities’ procurement of thermometers—it portrays TOK NV to investors as having made a
successful “pivot” to the business of procuring PPE in the face of the Covid-19 pandemic.  This
was not true, as Caridi well knew, or which he recklessly disregarded.  Rather, the TOK Entities
had attempted to make a pivot to the business of procuring PPE but had already failed
spectacularly.
57. The truth, which Caridi and TOKI knowingly, or recklessly, hid from investors,
was that the TOK Entities were unable to leverage any supposed medical contacts or purported
international relationships to obtain N-95 masks for Hospital A, failing to fulfill their obligations
in the largest deal the companies had ever had.  No successful “pivot” had occurred.  Rather, the
failed attempt at a pivot had resulted in the TOK Entities owing Hospital A more than
$11 million that they could not repay, creating a massive liability for the TOK Entities.
58. The First Press Release also stated that TOKI intended to buy back up to
five percent of its outstanding common shares because TOKI “believes that, from time to time,
the market price of its Shares may not reflect the underlying value of the Company’s business
and future prospects.”  This, too, was false and misleading, as Caridi also knew or which he
recklessly disregarded.
59. TOKI’s assertion about its purported stock buyback plan created the false
impression that TOKI’s shares were, or could be, undervalued given TOKI’s supposed
successful pivot to its new business of procuring and distributing PPE.  However, at the time of

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the statement, TOKI had just incurred an undisclosed debt to Hospital A of more than $11
million due to its inability to procure PPE, had defaulted on its Repayment Plan with Hospital A
to repay that debt, and had no viable path to repaying Hospital A an amount that vastly exceeded
all revenue TOKI had ever earned.  In light of the failed Hospital A deal and TOKI’s default on
the Repayment Plan, neither TOKI nor Caridi had any basis to believe that the market price for
TOKI’s shares did not reflect the incremental value of TOKI’s PPE procurement business.  In
fact, the opposite was true:  the market did not yet reflect the detrimental effect of TOKI’s
massive PPE procurement failure related to Hospital A because Caridi had prevented TOKI from
disclosing that fact.  Caridi likewise prevented TOKI from disclosing that he, and his family and
associates, had profited from the Hospital A deal.
60. The market viewed the First Press Release as a positive development, causing a
spike in TOKI’s trading volume and share price in both the United States and Canada.
61. On OTC Link, in the United States, in the two weeks before the publication of the
First Press Release, TOKI shares had an average daily trading volume of 35,761 shares.  On the
day of the First Press Release, 204,285 shares traded on OTC Link—more than five times the
average of the prior two weeks.  Additionally, on the day before the First Press Release, OTC
Link quoted TOKI’s closing share price as $0.018 per share.  On the day of the First Press
Release, TOKI’s share price quoted on OTC Link increased by 36% to $0.0242 per share and,
the following day, increased by another 34% to $.0325.
62. A similar effect happened on the CSE.  In the two weeks before the First Press
Release, approximately 315,000 TOKI shares traded each day on the CSE, but on the two trading
days after the First Press Release, a total of nearly 3.8 million TOKI shares traded.  During that

18
same time, TOKI’s share price on the CSE increased from $0.10, on the day before the First
Press Release, to $0.25, on the day after the First Press Release.
b. TOKI’s Second False and Misleading Press Release
and Caridi’s False and Misleading Statement
63. On or around May 14, 2020, Caridi caused the TOK Entities to contract to
procure medical gowns for a purchaser in Canada.  The TOK Entities’ sales invoices for the
gown transaction were less than ten percent of the Hospital A deal.  With Caridi’s assistance,
TOKI issued a press release touting the medical gown transaction as further evidence of TOKI’s
profitable new PPE business (the “Second Press Release”).
64. As with the First Press Release, the Second Press Release promoted the false
impression that TOKI had executed a successful strategy to procure and distribute PPE to
capitalize on the demands of the Covid-19 pandemic.  The Second Press Release also stated that
no undisclosed material events had occurred at TOKI in the prior six months.  Neither the
impression of TOKI’s success nor the statement that TOKI had not had an undisclosed material
event was true.
65. TOKI issued the Second Press Release on the morning of June 1, 2020.
Consistent with Caridi’s role in TOKI’s disclosure process, a draft of the Second Press Release
was provided to Caridi before publication.
66. The Second Press Release “announce[d] the completion of an order of 100,000
medical gowns to a hospital in Canada facilitated by TOKI management.”  TOKI again touted its
supposed successful pivot into the PPE procurement space, saying,
The Company’s US division, [TOK NV], has developed a strategic focus
during these uncertain times to leverage its medical contacts and international
relationships to procure medical equipment and personal protective equipment
(PPE) to [sic] governments, municipalities, and healthcare distributors in
Canada and the US.

19
This statement was false and misleading.  In the context of the Second Press Release—which
touted TOKI’s procurement of medical gowns—it suggests to investors that TOK NV had
crafted and enacted an effective plan to procure PPE in the face of the Covid-19 pandemic.
4

67. Caridi knew, or recklessly disregarded that, this was false.  To the extent TOK
NV was purporting to leverage supposed medical contacts or purported international
relationships to procure PPE, it had already failed and had caused the TOK Entities to incur a
more than $11 million liability that dwarfed any other prospects the companies might have.
Simultaneously, Caridi had siphoned off profits for himself.  Nowhere is any of this disclosed in
the Second Press Release.
68. The Second Press Release then quotes Caridi as saying,
TOKI is pleased to offer life saving personal protective equipment to hospitals
and municipalities in need.  We will continue to push forward and expedite
the procurement of products in this ongoing fight against COVID-19.  There
are a lot of difficulties in procuring PPE and medical equipment that we have
overcome and are [sic] confident in our ability to provide PPE and medical
devices for the foreseeable future.
69. This statement was also false and misleading, as Caridi well knew or recklessly
disregarded.  While touting the TOK Entities’ purported success in having already “overcome”
difficulties in procuring PPE and medical equipment in the Covid-19 pandemic, Caridi’s
statement conspicuously omits that the TOK Entities were unable to overcome those exact
difficulties only weeks earlier in the most significant transaction in the companies’ history and
had failed to obtain the 3 million N-95 masks for which Hospital A had paid more than $13
million.

4
 Notably, one week after the Second Press Release, the Canadian entity that had purchased the
gowns from TOKI informed Caridi that the gowns provided were unacceptable and the purchaser
demanded to return them.

20
70. Finally, the Second Press Release stated that the Ontario Securities Commission
had issued a new rule temporarily permitting companies to delay the filing of their annual
audited financial statements and announced that TOKI would use this rule to delay disclosure of
its annual financial statements for 2019.  The Second Press Release then assured TOKI’s
investors that TOKI had already disclosed all material events that had occurred since its prior
annual financial statements were filed in November 2019.
71. In particular, the Second Press Release said,
Other than as previously disclosed by the Company and herein with this press
release, the Company confirms that there have been no material business
developments since the date of its third-quarter interim financial statements
that were filed on November 21, 2019, other than as a result of the impact of
the restatement disclosed above.
72. Caridi knew, or recklessly disregarded, that this was false and misleading.
Contrary to the representation that “no material business developments” had occurred within
TOKI since November 21, 2019 that TOKI had not already disclosed, TOKI’s failed deal with
Hospital A and the resulting liability of more than $11 million had occurred during that period
and had not been disclosed.  Among other things, this false and misleading statement suggested
to investors that TOKI was a stable company with no material changes in its financial condition
in the past six months despite the Covid-19 pandemic.  This was far from true.
73. Immediately following the Second Press Release, both the daily average trading
volume and share price for TOKI shares on the CSE and quoted on OTC Link remained elevated
as compared to the trading volume and share price for TOKI shares in the weeks before the First
Press Release.
74. Read together, the TOKI Press Releases created an impression of TOKI’s
business and condition that is inconsistent with the truth of what was happening within the TOK
Entities.  The TOKI Press Releases conveyed to investors that, beginning in May 2020, TOKI

21
added a new and successful business line of procuring PPE, had overcome the difficulties in
obtaining PPE in the pandemic, and that the pivot and change in strategy had resulted in the TOK
Entities completing two successful business transactions.  What was not disclosed to investors,
however, is that weeks before the First Press Release, the TOK Entities had failed to procure
$13 million worth of PPE; that Caridi had enriched himself, his family, and his business
associates with proceeds from that transaction; and that the TOK Entities were left owing
Hospital A millions of dollars that they had neither the assets nor the revenue to repay.
IV. Caridi Attempts to Cover Up the Failed Hospital A Transaction and His
Self-Dealing, Which Are Revealed When Hospital A Sues the TOK Entities
75. Beginning in March 2020, Caridi repeatedly lied to the TOK Entities’ other senior
management and board members about the Hospital A transaction.  This deception allowed
Caridi to misappropriate funds paid by Hospital A to TOK NV for himself and his family.  It also
prevented certain TOKI personnel from understanding the full scope of Caridi’s scheme,
ensuring that TOKI’s disclosures would not reveal the failed Hospital A deal or the fallout from
that failure.
76. During a meeting of TOKI’s Board of Directors on April 4, 2020—when Caridi
had already agreed that the TOK Entities would deliver three million N-95 masks to Hospital A
and Hospital A had already paid more than $13 million—Caridi told TOKI’s other board
members that his personal consulting company was engaging in international PPE procurement
deals and that “there might be an opportunity for [TOKI] to participate in such opportunities” in
the future.  TOKI’s Board of Directors agreed that Caridi would “provide details of any firm
proposals to the Board for consideration with respect to potential involvement by TOKI.”  Caridi
knowingly, or recklessly, did not disclose that it was the TOK Entities, and not his personal
consulting company, that had already engaged in a substantial PPE deal with Hospital A, had

22
already received payment for that deal (portions of which Caridi had paid to himself), and had
already failed to meet their obligations in that deal.
77. Thereafter, Caridi continued to withhold information about the Hospital A deal
from other senior management and board members.  During an April 27, 2020, meeting of
TOKI’s Board of Directors, the possibility of the TOK Entities’ participation in PPE
procurement deals was raised again.  Caridi told the other board members that his personal
consulting company was in the process of negotiating a potential PPE transaction in Québec.
Caridi promised that “he would consider including TOKI in any revenue received from certain of
these transactions” and that “he would not enter into any PPE transactions with any counterparty
without the prior consent of the Board.”  Caridi knowingly, or recklessly, did not disclose that
the Hospital A deal had already happened or that he was, at that time in late April 2020,
negotiating a plan to repay to Hospital A the more than $13 million the TOK Entities owed.
78. TOKI’s Board of Directors held another meeting on July 26, 2020, at which
Caridi again obfuscated.  By that time, Caridi had agreed to the Repayment Agreement and then
caused the TOK Entities to default on that agreement.  Also by that time, Hospital A had retained
outside counsel which had sent demand letters to Caridi threatening to sue the TOK Entities if
repayment was not swiftly made, and Caridi was in the process of retaining counsel to represent
him in response to Hospital A’s threatened action.  Still, Caridi knowingly, or recklessly, did not
tell the TOK Entities’ other senior management and board members about critical aspects of the
discussions with Hospital A, the Repayment Agreement, the default on the Repayment
Agreement, or the threatened lawsuit.
79. On or around August 6, 2020, TOKI’s senior management and Board of Directors
learned of Caridi’s failures and lies when Hospital A filed a lawsuit in the Ontario Superior

23
Court of Justice alleging fraud by TOKI, TOK NV, Caridi, the Consultant, and the Consultant’s
company.  Hospital A’s lawsuit demanded repayment of more than $11.19 million and asked the
Ontario Superior Court to impose a receiver over the TOK Entities and the other defendants and
their assets.
80. On September 2, 2020, TOKI publicly filed its annual audited financial
statements for 2019.  In those financial statements, TOKI publicly disclosed, for the first time,
that a lawsuit had been filed against it “related to a contract by TOK NV” and that the plaintiff
sought “damages in the amount of $11,200,000 as well as punitive damages of CAD$500,000
and other relief including an order appointing a receiver/manager over all the assets, undertaking,
and property of TOKI.”  TOKI’s annual financial statements warned investors that TOKI may
not continue as a going concern due to, among other things, this litigation against it.
81. On September 22, 2020, TOKI filed interim financial statements for the three
months ended March 31, 2020.  In the interim financial statements, TOKI disclosed, for the first
time, that it had incurred a “contract liability” of more than $12 million.  This reflected the TOK
Entities’ unpaid debt to Hospital A.  TOKI’s interim financial statements also disclosed that
TOKI had earned no revenue from the Hospital A deal.
82. On December 16, 2020, the Ontario Superior Court granted Hospital A’s request
for an injunction and appointed a receiver over TOK NV’s business.  The receiver later
determined that all masks the TOK Entities had purchased with funds from Hospital A had a
value of approximately $200,000.
83. On March 25, 2021, TOKI reached a settlement with Hospital A pursuant to
which TOKI agreed to, among other things, assign to Hospital A all of its rights, title, and
interest in TOK NV and its claims against Caridi, Consultant, and Company B.

24
FIRST CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder
84. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 83.
85. Defendant, directly or indirectly, in connection with the purchase or sale of
securities, by the use of means or instrumentalities of interstate commerce, or the mails, or the
facilities of a national securities exchange, knowingly or recklessly (a) employed one or more
devices, schemes, or artifices to defraud, (b) made one or more untrue statements of a material
fact or omitted to state one or more material facts necessary in order to make the statements
made, in light of the circumstances under which they were made, not misleading, and/or
(c) engaged in one or more acts, practices, or courses of business which operated or would
operate as a fraud or deceit upon other persons.
86. By reason of the foregoing, Defendant, directly or indirectly, has violated and,
unless enjoined, will again 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].
SECOND CLAIM FOR RELIEF
Aiding and Abetting Violations of
Exchange Act Section 10(b) and Rule 10b-5(b) Thereunder
87. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 83.
88. As alleged above, TOKI violated Exchange Act Section 10(b) [15 U.S.C. §
78j(b)] and Rule 10b-5(b) [17 C.F.R. § 240.10b-5(b)] thereunder, by, directly or indirectly, in
connection with the purchase or sale of securities, and by the use of means or instrumentalities of
interstate commerce, or the mails, or the facilities of a national securities exchange, knowingly or
recklessly making one or more untrue statements of a material fact or omitting to state one or

25
more material facts necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.
89. Defendant knowingly or recklessly provided substantial assistance to TOKI with
respect to its violations of Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5(b)
[17 C.F.R. § 240.10b-5b] thereunder.
90. By reason of the foregoing, Defendant is liable pursuant to Exchange Act Section
20(e) [15 U.S.C. § 78t(e)] for aiding and abetting TOKI’s violations of Exchange Act Section
10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5(b) [17 C.F.R. § 240.10b-5(b)] thereunder and, unless
enjoined, Defendant will again aid and abet these violations.
PRAYER FOR RELIEF

 WHEREFORE, the Commission respectfully requests that the Court enter a Final
Judgment:
I.
Finding that Defendant committed the violations alleged in this Complaint;
II.
Permanently enjoining Defendant from violating, directly or indirectly, 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];
III.
Ordering Defendant to disgorge all ill-gotten gains and/or unjust enrichment received
directly or indirectly, with pre-judgment interest thereon, as a result of the alleged violations,
pursuant to Exchange Act Sections 21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(5) and
78u(d)(7)];

26
IV.
Ordering Defendant to pay civil monetary penalties under Section 21(d)(3) of the
Exchange Act [15 U.S.C. § 78u(d)(3)];
V.
Permanently prohibiting Defendant from acting as an officer or director of a public
company pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)];
VI.
Permanently prohibiting Defendant from participating in any offering of any penny stock
pursuant to Section 21(d)(6) of the Exchange Act [15 U.S.C. § 78u(d)(6)]; and
VII.
Granting any other and further relief this Court may deem just and proper.

JURY DEMAND
The Commission demands trial by jury.
Dated:  New York, New York
September 22, 2023
/s Antonia M. Apps                     .
ANTONIA M. APPS
REGIONAL DIRECTOR
Thomas P. Smith, Jr.
Adam S. Grace
Christopher M. Colorado
Rhonda Jung
Brian A. Kudon
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street, Suite 20-100
New York, New York 10004-2616
(212) 336-9143 (Colorado)
[email protected]

UNITED STATES DISTRICT COURT 
DISTRICT OF CONNECTICUT 

 
SECURITIES AND EXCHANGE 
COMMISSION, 
 
                                             Plaintiff, 
 
                        -against- 
 
MICHAEL CARIDI, 
 
                                             Defendant.  

 
 
 
COMPLAINT 

   
23 Civ. 1243 

 
   

JURY TRIAL DEMANDED 
  

          

 
Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against 

Michael Caridi (“Caridi” or “Defendant”), alleges as follows: 

SUMMARY 

1. This action arises out of a fraudulent scheme by Caridi, the former chairman and 

chief executive of Tree of Knowledge International, Inc. (“TOKI”), to hide from investors that 

TOKI and its subsidiary, Tree of Knowledge Inc. (“TOK NV,” together with TOKI, the “TOK 

Entities”), had failed to meet their obligations in the largest transaction in the TOK Entities’ 

history, that Caridi had misappropriated substantial sums from that transaction, and that, due to 

the TOK Entities’ failure in that transaction, they now faced a liability that dwarfed their assets 

and revenues. 

2. At the end of March 2020, at the outset of the Covid-19 pandemic, Caridi misled 

a third-party hospital to believe that the TOK Entities—which were unprofitable companies that 

operated three pain management clinics and sold hemp-based cannabidiol (“CBD”) products—

had a vast international network of medical equipment suppliers through which the TOK Entities 

could immediately procure millions of N-95 respirator masks that the hospital desperately 

needed to protect its employees.  The hospital paid the TOK Entities nearly $13.7 million, more 

Case 3:23-cv-01243   Document 1   Filed 09/22/23   Page 1 of 26



 

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than double the total revenue TOKI had ever earned, for three million N-95 masks to be 

delivered within two days. 

3. Caridi and the TOK Entities ultimately procured zero N-95 masks for the hospital.  

Instead, Caridi paid a substantial portion of the more than $13 million received from the hospital 

to himself, his family, and his business associates.  When no N-95 masks were delivered and the 

hospital demanded repayment, Caridi promised the TOK Entities would repay the hospital in 

full.  They did not.  As a result, the TOK Entities were left with a massive liability owed to the 

hospital, and insufficient assets or revenues to make repayment.   

4. Caridi kept this scheme—the transaction, its failure, and his self-dealing—hidden 

from the TOK Entities’ other senior management and board members.  And those material facts 

were not disclosed to investors.  Instead, weeks later, in May and June 2020, TOKI, with 

Caridi’s assistance, issued two press releases touting two small transactions in which the TOK 

Entities had procured thermometers and medical gowns for third parties.  The press releases 

falsely and misleadingly portrayed the TOK Entities as having made a successful “pivot” to a 

new and valuable strategy of procuring personal protective medical equipment (“PPE”) for 

hospitals and other medical purchasers, quoted Caridi as lauding the TOK Entities for 

overcoming obstacles to procuring PPE in the Covid-19 environment, and assured investors that 

no material undisclosed events had occurred at TOKI.  Neither press release said anything about 

the massive, failed N-95 mask transaction or the financial fallout from that failure. 

5. In truth, contrary to the press releases, the undisclosed, failed attempt by Caridi 

and the TOK Entities to pivot to the PPE procurement business had already resulted in the TOK 

Entities owing the hospital millions of dollars that they could not repay and created a massive, 

hidden liability for the TOK Entities that one of TOKI’s board members would later describe as 

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“cataclysmic.”  Indeed, due to the undisclosed failed transaction, a court later placed TOK NV 

into receivership, TOKI eventually handed over ownership of that subsidiary and its assets and 

claims to the hospital, and Caridi was forced to resign. 

6. By virtue of this conduct, and as alleged herein, Caridi violated Section 10(b) of 

the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)], and Rule 10b-5 

thereunder [17 C.F.R. § 240.10b-5], both as a primary violator and by aiding and abetting 

TOKI’s violations of Section 10(b) of the Exchange Act and Rule 10b-5(b) thereunder.  The 

Commission asks the Court to enjoin Caridi from future securities law violations, require him to 

disgorge ill-gotten gains together with prejudgment interest, require him to pay a civil penalty, 

bar him from serving as an officer or director of a public company, and bar him from dealing in 

penny stocks. 

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

7. The Commission brings this action pursuant to the authority conferred upon it by 

Exchange Act Section 21(d) [15 U.S.C. § 78u(d)]. 

8. The Commission seeks a final judgment (a) permanently enjoining Caridi from 

violating the federal securities laws alleged herein; (b) ordering Caridi to disgorge all ill-gotten 

gains he has received as a result of the violations alleged herein pursuant to Exchange Act 

Sections 21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(5) and 78u(d)(7)] and to pay prejudgment 

interest thereon; (c) ordering Caridi to pay civil money penalties pursuant to Exchange Act 

Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; (d) permanently prohibiting Caridi from serving as an 

officer or director that has a class of securities registered under Exchange Act Section 12  

[15 U.S.C. § 78l] or that is required to file reports under Exchange Act Section 15(d) [15 U.S.C. 

§ 78o(d)], pursuant to Exchange Act Section 12(d)(2) [15 U.S.C. § 78u(d)(2)]; (e) permanently 

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prohibiting Caridi from participating in an offering of any penny stock, pursuant to Section 

21(d)(6) of the Exchange Act [15 U.S.C. § 78u(d)(6)]; and (f) any other and further relief the 

Court may deem just and appropriate. 

JURISDICTION AND VENUE 

9. This Court has jurisdiction pursuant to Sections 21(d) and 27 of the Exchange Act 

[15 U.S.C. §§ 78u(d) and 78aa].  Defendant, directly and indirectly, made use of the mails, or the 

means and instrumentalities of interstate commerce, in connection with the transactions, acts, 

practices, and courses of business alleged herein. 

10. Venue lies in this District under Section 27 of the Exchange Act [15 U.S.C. 

§ 78aa].  Certain of the acts, practices, transactions, and courses of business alleged in this 

Complaint occurred within this District.  Among other things, Caridi resides in this District and 

conducted business for the TOKI Entities, including conduct described herein, in and from this 

District. 

DEFENDANT 

11. Michael Caridi, age 59, is a resident of Greenwich, Connecticut.  During the 

relevant period, Caridi served as chairman of the TOKI Board of Directors and, until April 28, 

2020, as TOKI’s interim chief executive officer.  Caridi also served as the President and a 

director of TOK NV.  In February 2021, Caridi resigned as President and director of TOK NV 

and, in September 2021, resigned from TOKI’s Board of Directors.  Also during the relevant 

period, Caridi was one of TOKI’s largest shareholders, owning more than 10 million TOKI 

shares.  During the Commission’s investigation concerning Caridi’s potential securities law 

violations that preceded this action, including the violations alleged herein, Caridi asserted his 

Fifth Amendment right against self-incrimination and, on that basis, refused to provide testimony 

or to produce documents or other materials in response to Commission investigative subpoenas. 

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RELEVANT NON-PARTIES 

12. Tree of Knowledge Inc. (“TOK NV”) was formed in 2015 under the laws of 

Nevada, with its principal place of business in Spokane, Washington.  During the relevant 

period, TOK NV was a subsidiary of TOKI, and TOK NV produced and sold hemp-based CBD 

products. 

13. Tree of Knowledge International Corp. (“TOKI”) was formed in 2018 under 

the laws of British Columbia, through a reverse merger between TOK NV and a publicly traded 

shell company, Courtland Capital, Inc.  TOKI has its principal place of business in Toronto, 

Canada, and it operates pain management clinics and produces and distributes hemp-based CBD 

products.  During the relevant period, TOKI’s shares were publicly listed on the Canadian 

Securities Exchange (“CSE”) under the symbol “TOKI” and they were quoted under the symbol 

“TOKIF” on OTC Link (formerly known as the “Pink Sheets”), an electronic interdealer 

quotation system in the United States operated by OTC Markets Group, Inc. (“OTC Markets”).  

Also during the relevant period, TOKI reported its financial results on a consolidated basis, 

reflecting the performance of both TOKI and its subsidiaries, including TOK NV.  After Caridi’s 

fraudulent scheme alleged herein was revealed, TOKI changed its name to Optima Medical 

Innovations Corp.  At all relevant times, TOKI’s stock was a “penny stock” as that term is 

defined in Section 3(a)(51) of the Exchange Act [15 U.S.C. § 78c(a)(51)], and Rule 3a51-1 

thereunder [17 C.F.R. § 240.3a51-1]. 

14. Hospital A is a non-profit entity that is a large, specialized care hospital in 

Québec, Canada. 

DEFENDANT’S FRAUDULENT SCHEME 

15. Caridi engaged in a fraudulent scheme to hide from investors the TOK Entities’ 

failure to meet their obligations in the largest transaction the companies had ever done, and that 

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Caridi had used payments to the TOK Entities in that transaction to enrich himself, his family, 

and his business associates, ultimately leaving the TOK Entities with a massive, undisclosed 

liability while, at the same time, assisting TOKI in making, or making himself, false and 

misleading public disclosures that portrayed the TOK Entities as having made a successful pivot 

to the PPE procurement business. 

I. Caridi Attempts to Take Advantage of  
Hospital A’s Urgent Need for N-95 Masks. 

16. Between 2018 and early 2020, TOKI and its subsidiaries operated three pain 

management clinics and sold hemp-based CBD products.  TOKI was not profitable.  For 2018 

and 2019 combined, TOKI earned approximately $6 million in revenue but incurred losses of 

more than $33 million.  By the end of 2019, TOKI had only $63,432 in cash.   

17. By mid-March 2020, at the outset of the COVID-19 pandemic, it was widely 

reported that many healthcare providers faced shortages of PPE.  At that time, neither of the 

TOK Entities had any experience procuring PPE for sale and distribution.  Nonetheless, Caridi, 

who also had no experience in PPE procurement, sought to capitalize on the healthcare 

providers’ desperate need.  

18. On or around March 18, 2020, Caridi informed one of his personal business 

associates (“Consultant”) that he would like to enter the PPE procurement business.  On March 

25, 2020, Consultant informed Caridi that a large Québec hospital, Hospital A, was looking to 

make an urgent PPE purchase.  That evening, on Caridi’s behalf, Consultant informed 

Hospital A that Caridi and the TOK Entities could procure large quantities of KN-95 masks.  

Hospital A responded that it would only purchase N-95 masks. 

19. N-95 masks are materially different from KN-95 masks.  For example, N-95 

masks are regulated by the CDC’s National Institute of Occupational Safety and Health and had 

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been approved for use in Canadian hospitals, but KN-95 masks are not similarly regulated and 

had not received similar approval for use in Canadian hospitals. 

20. The next day, March 26, 2020, Caridi offered, on behalf of the TOK Entities, to 

procure three million N-95 masks for Hospital A and to deliver them within two days, by March 

28, in exchange for $11.9 million, plus fees and taxes.  Hospital A accepted the offer.  That 

evening, Caridi caused TOKI to issue two invoices to Hospital A totaling $13,693,522, inclusive 

of fees and Québec sales tax, for “Urgent Delivery of Masks.” 

21. On March 27, 2020, Hospital A wired $13,693,522 to a U.S.-based bank account 

in the name of TOK NV controlled by Caridi.  Before receiving those funds, TOK NV’s bank 

accounts held approximately $7,301, and the TOK Entities’ bank accounts held approximately 

$200,000.  

22. Caridi’s transaction with Hospital A was the largest the TOK Entities had ever 

done.  Indeed, the approximately $13.7 million paid by Hospital A to TOK NV was more than 

double the total revenue TOKI had earned since it had been in existence. 

23. Despite the size of the Hospital A transaction and the substantial importance of 

the deal to the TOK Entities’ business, Caridi did not inform the TOK Entities’ other senior 

management or its Board of Directors that the TOK Entities had contracted with Hospital A to 

procure N-95 masks or that Hospital A had transferred nearly $13.7 million to TOK NV in 

payment for those masks. 

II. Caridi Fails to Procure Any N-95 Masks, But Disburses Nearly All  
of the Nearly $13.7 Million TOK NV Had Been Paid By Hospital A. 

24. The TOK Entities never delivered any N-95 masks to Hospital A.  Nevertheless, 

Caridi disbursed nearly all funds Hospital A had paid to TOK NV—including making substantial 

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payments to himself and his family—leaving the TOK Entities owing an undisclosed liability to 

Hospital A that was so large as to put their operations at risk. 

a. The TOK Entities Delivered Zero N-95 Masks to Hospital A  
and the Non-N-95 Masks They Delivered Were Unusable 

25. On March 28, 2020, the day the TOK Entities were due to deliver three million 

N-95 masks to Hospital A, Caridi caused TOKI to enter a contract to procure masks.  That 

contract, with a United States-based CBD products company that had no experience procuring 

PPE and that was owned by another of Caridi’s personal business associates (“Company B”), 

provided that Company B would sell three million masks to TOKI.  The contract described those 

masks as both KN-95 masks and N-95 masks and did not provide a time by which Company B 

would complete delivery.  The contract stated only that an “initial shipment” of 100,000 masks 

from China would be initiated on March 29, 2020. 

26. The next day, March 29, 2020, Caridi sent Hospital A what appeared to be a 

screenshot of a shipping manifest purporting that 100,000 KN-95 masks were to be sent from 

China to Québec.  Hospital A quickly reminded Caridi that the KN-95 masks were not the same 

as, and were not a suitable replacement for, the N-95 masks Hospital A had ordered and paid for. 

27. Even though Caridi knew TOKI’s contract with Company B contemplated that 

KN-95 masks might be delivered, Caridi told Hospital A that the 100,000 masks referenced in 

the screenshot of the shipping manifest were, in fact, N-95 masks and that the manifest was 

intentionally incorrect to help the masks clear customs in China.  Caridi’s statement to 

Hospital A was false, as Caridi knew or recklessly disregarded. 

28. By April 4, 2020, a week after Hospital A had placed its order, the TOK Entities 

had delivered zero masks to Hospital A, and Hospital A had concluded that whatever masks the 

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TOK Entities had in transit were KN-95 masks.  Hospital A again stressed to Caridi that it had 

purchased and paid for N-95 masks and that KN-95 masks were unacceptable. 

29. Caridi knew, or recklessly disregarded, that he had failed to procure any N-95 

masks.  He also knew, or recklessly disregarded, that Hospital A was poised to reject the KN-95 

masks.  So, Caridi made misrepresentations to Hospital A concerning the adequacy of the KN-95 

masks to attempt to pass them off as acceptable.  Caridi told Hospital A that KN-95 masks were 

regulated and approved by South Korea’s Ministry of Food and Drug Safety.  This was not true.  

Caridi also told Hospital A that KN-95 masks were now acceptable for use in Canadian hospitals 

and that those masks “meet or exceed” the regulatory standards applicable to N-95 masks.  

Hospital A understood those statements to be false.   

30. The TOK Entities finally made their first delivery to Hospital A on April 9, 2020:  

2,000 KN-95 masks.  On April 13, the TOK Entities delivered an additional 154,000 KN-95 

masks.  The packaging for all KN-95 masks the TOK Entities had delivered expressly stated that 

the masks were for “Non medical use.” 

31. Around the same time, Hospital A discovered that the TOK Entities had no 

Canadian tax identification number.  As such, the TOK Entities had not been entitled to collect 

the $1,188,022 in Québec sales tax that TOKI had invoiced to Hospital A and that Hospital A 

had paid to TOK NV.  Hospital A demanded that the TOK Entities refund that sales tax.  Caridi 

repeatedly promised Hospital A that the TOK Entities would repay the full amount of wrongly 

collected tax, but the TOK Entities repaid only $500,000. 

32. On April 14, 2020, Caridi informed Hospital A that between 240,000 and 400,000 

additional masks would be delivered that afternoon.  In response, the Assistant Deputy Minister 

for Québec’s Ministry of Health and Social Services e-mailed Caridi, stating that the TOK 

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Entities had failed to deliver what Hospital A had ordered and paid for; that, after April 14, 

Hospital A would not accept any deliveries “until we are able to validate the quality of the masks 

you’ve sent us”; and that Hospital A would test the quality of the KN-95 masks “to see if 

something could be salvaged out of this whole mess.” 

33. The TOK Entities delivered no additional masks to Hospital A on or after 

April 14. 

34. The next week, a third-party health and safety research laboratory tested samples 

from the 156,000 KN-95 masks the TOK Entities had delivered to Hospital A.  In a report 

analyzing the KN-95 masks, the laboratory concluded that the masks were “significantly” less 

protective than a basic surgical mask—which, in turn, is less protective than an N-95 mask—and 

that the “masks are not Respiratory Protection Devices (RPD).  They cannot and should not be 

used as respiratory protection for medical personnel treating patients with COVID-19 or any 

other disease that can be spread by airborne transmission.” 

35. By April 23, 2020, Hospital A believed Caridi had lied about the TOK Entities’ 

ability to deliver N-95 masks and demanded that the TOK Entities repay it approximately $13.19 

million.1  Caridi knew, or recklessly disregarded, that the Hospital A transaction, and his attempt 

to pivot the TOK Entities into the PPE procurement business, had been a failure, and he 

promised Hospital A he would submit a reimbursement proposal.   

36. After multiple communications with Hospital A, including with Hospital A’s 

outside counsel, Caridi agreed, on May 1, 2020, that the TOK Entities would repay $13,193,503 

to Hospital A pursuant to a payment plan (the “Repayment Agreement”):  first, by May 2, the 

 
1 The purchase price of $13,693,522 minus the $500,000 in improperly collected taxes that the 
TOK Entities had repaid to Hospital A on April 13, 2020, see supra paragraph 31. 

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TOK Entities would pay “the sum of $1,000,000 USD, as partial repayment”; and, second, the 

TOK Entities would “make minimum payments of $1,000,000 USD and more if possible, every 

10 calendar days starting May 4th, 2020” until the full amount was repaid. 

37. As discussed below, when Caridi agreed to the Repayment Agreement, he knew, 

or recklessly disregarded, that he had already caused TOK NV to disburse most of the funds 

Hospital A had paid and that the TOK Entities did not have sufficient assets or revenues to make 

repayment.   

38. Despite the TOK Entities’ inability to procure PPE for Hospital A, their failure to 

meet their obligations in a transaction in which Caridi had bound the TOK Entities to deliver 

$13 million worth of goods, and the massive debt the TOK Entities now owed to Hospital A 

which threatened their very existence, Caridi still did not inform the TOK Entities’ other senior 

management or board members of all material details regarding the Hospital A transaction or that 

he had agreed to the Repayment Agreement. 

b. Caridi Caused the TOK Entities to Disburse More Than $8 Million,  
Including to Himself, His Family, and His Business Partners 

39. Between March 28, 2020, when Hospital A paid $13,693,522 to TOK NV’s bank 

account, and May 1, 2020, when Caridi agreed to the Repayment Agreement, Caridi knowingly, 

or with reckless disregard, caused TOK NV to transfer nearly $6 million to persons and entities 

other than Hospital A, including payments to himself, his family, and his business associates.   

40. For example, between April 1 and April 20, 2020, Caridi caused TOK NV to 

make seven payments to himself totaling $953,500.  By contrast, in the three months prior to 

those seven payments, TOK NV had paid Caridi a total of only $9,312. 

41. Between April 10 and April 17, 2020, Caridi also caused TOK NV to make six 

payments to his son totaling $26,000. 

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42. During the first three weeks of April 2020, Caridi also knowingly, or with 

reckless disregard, caused TOK NV to make more than $4 million in payments to entities owned 

by Caridi’s business partners in other ventures.  This included, among other payments: 

a. $744,001 to a company owned by the Consultant, who had informed 

Caridi that Hospital A was looking to purchase PPE; 

b. $920,000 to Company B, with which the TOK Entities had contracted to 

acquire masks;2 

c. more than $1.6 million to Company C, an entity owned by an individual 

with whom Caridi is involved in a business venture unrelated to the TOK 

Entities and who is also an associate of the owner of Company B; and  

d. $900,000 to yet another entity owned by the owner of Company C. 

43. As of May 1, 2020, when Caridi agreed to the Repayment Agreement obligating 

the TOK Entities to repay more than $13 million to Hospital A, the TOK Entities had 

approximately $5.3 million, and Caridi knew, or recklessly disregarded, that the TOK Entities 

did not have sufficient assets or revenues to repay Hospital A under the Repayment Agreement. 

44. Unsurprisingly, the TOK Entities quickly defaulted on the Repayment 

Agreement.  The TOK Entities were obligated to pay $1 million to Hospital A on May 2, 2020, 

and then to pay at least $1 million to Hospital A every ten days beginning on May 4, until the 

full approximately $13.19 million was repaid.  However, they paid only $2 million to 

Hospital A:  $1 million on May 4, $500,000 on May 14, and $500,000 on May 15.  Then, Caridi 

 
2 On the same day as Caridi caused TOK NV to make this $920,000 payment to Company B, 
Company B wired $30,000 of that payment to Caridi’s personal bank account in what appears to 
be a kickback related to the Hospital A deal. 

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stopped causing the TOK Entities to make any repayment to Hospital A.  And the TOK Entities 

were left owing more than $11.19 million.3 

45. Even after Caridi agreed to the Repayment Agreement, and despite that 

essentially all money held by TOK NV was money it had received from Hospital A, Caridi 

knowingly, or with reckless disregard, continued to cause TOK NV to make substantial 

payments of that money to persons and entities other than Hospital A, including to himself, his 

family, and his business associates. 

46. Between May 1 and May 21, 2020, Caridi caused TOK NV to transfer more than 

$2.5 million to persons and entities other than Hospital A, including, among other payments:  

(a) two payments to himself totaling $169,822; (b) three payments to his son totaling $44,912; 

(c) a payment of $45,000 to the Consultant’s company; and (d) payments of at least $1 million 

purportedly for TOKI’s “business expenses” and to purchase medical thermometers, gloves, and 

gowns that the TOK Entities intended to sell to third parties other than Hospital A. 

47. By May 22, 2020, the TOK Entities had less than $2.5 million. 

48. Even then, when the TOK Entities were in default on the Repayment Agreement 

and lacked the ability to repay their debt to Hospital A, Caridi did not disclose to the TOK 

Entities’ other senior management and board members all material details regarding the 

Hospital A deal, the Repayment Agreement, and the TOK Entities’ liability from their failure to 

make repayment to Hospital A.  Instead, he attempted to cover up his failure, and to put off the 

 
3 In connection with the Repayment Agreement, Caridi also told Hospital A that the TOKI 
Entities would provide a sample of N-97 masks that the TOKI Entities had procured and that, if 
acceptable to Hospital A, they would deliver some number of those masks to Hospital A to offset 
a portion of the debt owed.  The TOKI Entities never provided any sample of N-97 masks. 

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day of reckoning, by causing TOKI to make multiple misrepresentations to investors about the 

state of its business. 

III. Caridi Makes, and Assists TOKI in Making, Materially Misleading  
Statements Regarding the TOK Entities’ Business and Financial Condition. 

49. Between mid-May and early June 2020, TOKI, under Caridi’s direction, issued 

two press releases (“TOKI Press Releases”) through a business newswire service, on its own 

website, and on the websites for the CSE and OTC Markets, that touted the TOK Entities’ 

supposed success in pivoting to the PPE procurement business and overcoming the difficulties of 

obtaining PPE in the Covid-19 environment, and that assured investors of TOKI’s purported 

stable financial condition.  The TOKI Press Releases were false and misleading. 

50. Moreover, neither of the TOKI Press Releases said anything about the Hospital A 

deal; that the TOK Entities had failed to procure PPE in the largest transaction in the companies’ 

history; that, due to their failure to procure PPE for Hospital A and, subsequently, to make 

repayment to Hospital A, they now owed Hospital A more than $11 million; that they lacked 

funds to make repayment; or that, due to the debt owed to Hospital A, the TOK Entities might 

not continue as a going concern—events that another TOKI board member would later describe 

as “cataclysmic.”  Nor did either of the TOKI Press Releases disclose that Caridi had personally 

profited from the Hospital A deal. 

51. As TOKI’s chairman, Caridi was a member of TOKI’s informal corporate 

disclosure committee and was involved in all aspects of TOKI’s public disclosures.  This 

included preparing, reviewing, editing, and approving TOKI’s press releases, particularly where, 

as with the TOKI Press Releases, the disclosures concerned information about TOKI’s 

operations.  Caridi also provided quotes for each of the TOKI Press Releases. 

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52. Rather than using his role in TOKI’s disclosure process to ensure that investors 

were made aware of all material details of the most important contract and most significant 

failure in the TOK Entities’ history, which could be ruinous to TOKI, Caridi knowingly, or 

recklessly, used the TOKI Press Releases as an opportunity to mislead investors with lies about 

how TOKI was thriving in the face of the Covid-19 pandemic with new business deals and 

enduring financial stability.   

a. TOKI’s First False and Misleading Press Release 

53. In early May 2020, Caridi caused the TOK Entities to contract to procure 

thermometers for a purchaser in the United States.  The TOK Entities’ sales invoices for the 

thermometer transaction were less than ten percent of the Hospital A deal.  TOKI issued a press 

release touting the thermometer transaction as evidence of TOKI’s successful pivot into a new 

and valuable PPE procurement business, signaling that TOKI had effected a winning strategy to 

capitalize on the demands of the Covid-19 pandemic (the “First Press Release”). 

54. With Caridi’s assistance, TOKI issued the First Press Release on the morning of 

May 22, 2020.  Consistent with Caridi’s role in TOKI’s disclosure process, the First Press 

Release was provided to Caridi in draft form before its publication.  

55. The First Press Release announced “the completion of an order of 23,000 

thermometers to a healthcare distributor in Chicago, IL, facilitated by TOKI management.  This 

marks the Company’s first medical equipment supply transaction into the United States.”        

The First Press release then quoted Caridi as saying, “TOKI is proud to be on the forefront of 

this fight against COVID-19.  We will continue to leverage our network to provide the US and 

Canada the critical PPE supply necessary during these trying times.” 

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56. Next, the First Press Release stated,  

The Company’s US division, [TOK NV], has made a pivot during these 
uncertain times to leverage its medical contacts and international 
relationships to procure medical equipment and personal protective 
equipment (PPE) to governments, municipalities, and healthcare 
distributors in Canada and the US. 

This was false and misleading.  In the context of the First Press Release—which touted the TOK 

Entities’ procurement of thermometers—it portrays TOK NV to investors as having made a 

successful “pivot” to the business of procuring PPE in the face of the Covid-19 pandemic.  This 

was not true, as Caridi well knew, or which he recklessly disregarded.  Rather, the TOK Entities 

had attempted to make a pivot to the business of procuring PPE but had already failed 

spectacularly.   

57. The truth, which Caridi and TOKI knowingly, or recklessly, hid from investors, 

was that the TOK Entities were unable to leverage any supposed medical contacts or purported 

international relationships to obtain N-95 masks for Hospital A, failing to fulfill their obligations 

in the largest deal the companies had ever had.  No successful “pivot” had occurred.  Rather, the 

failed attempt at a pivot had resulted in the TOK Entities owing Hospital A more than 

$11 million that they could not repay, creating a massive liability for the TOK Entities. 

58. The First Press Release also stated that TOKI intended to buy back up to 

five percent of its outstanding common shares because TOKI “believes that, from time to time, 

the market price of its Shares may not reflect the underlying value of the Company’s business 

and future prospects.”  This, too, was false and misleading, as Caridi also knew or which he 

recklessly disregarded.   

59. TOKI’s assertion about its purported stock buyback plan created the false 

impression that TOKI’s shares were, or could be, undervalued given TOKI’s supposed 

successful pivot to its new business of procuring and distributing PPE.  However, at the time of 

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the statement, TOKI had just incurred an undisclosed debt to Hospital A of more than $11 

million due to its inability to procure PPE, had defaulted on its Repayment Plan with Hospital A 

to repay that debt, and had no viable path to repaying Hospital A an amount that vastly exceeded 

all revenue TOKI had ever earned.  In light of the failed Hospital A deal and TOKI’s default on 

the Repayment Plan, neither TOKI nor Caridi had any basis to believe that the market price for 

TOKI’s shares did not reflect the incremental value of TOKI’s PPE procurement business.  In 

fact, the opposite was true:  the market did not yet reflect the detrimental effect of TOKI’s 

massive PPE procurement failure related to Hospital A because Caridi had prevented TOKI from 

disclosing that fact.  Caridi likewise prevented TOKI from disclosing that he, and his family and 

associates, had profited from the Hospital A deal. 

60. The market viewed the First Press Release as a positive development, causing a 

spike in TOKI’s trading volume and share price in both the United States and Canada.   

61. On OTC Link, in the United States, in the two weeks before the publication of the 

First Press Release, TOKI shares had an average daily trading volume of 35,761 shares.  On the 

day of the First Press Release, 204,285 shares traded on OTC Link—more than five times the 

average of the prior two weeks.  Additionally, on the day before the First Press Release, OTC 

Link quoted TOKI’s closing share price as $0.018 per share.  On the day of the First Press 

Release, TOKI’s share price quoted on OTC Link increased by 36% to $0.0242 per share and, 

the following day, increased by another 34% to $.0325. 

62. A similar effect happened on the CSE.  In the two weeks before the First Press 

Release, approximately 315,000 TOKI shares traded each day on the CSE, but on the two trading 

days after the First Press Release, a total of nearly 3.8 million TOKI shares traded.  During that 

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same time, TOKI’s share price on the CSE increased from $0.10, on the day before the First 

Press Release, to $0.25, on the day after the First Press Release. 

b. TOKI’s Second False and Misleading Press Release  
and Caridi’s False and Misleading Statement 

63. On or around May 14, 2020, Caridi caused the TOK Entities to contract to 

procure medical gowns for a purchaser in Canada.  The TOK Entities’ sales invoices for the 

gown transaction were less than ten percent of the Hospital A deal.  With Caridi’s assistance, 

TOKI issued a press release touting the medical gown transaction as further evidence of TOKI’s 

profitable new PPE business (the “Second Press Release”).   

64. As with the First Press Release, the Second Press Release promoted the false 

impression that TOKI had executed a successful strategy to procure and distribute PPE to 

capitalize on the demands of the Covid-19 pandemic.  The Second Press Release also stated that 

no undisclosed material events had occurred at TOKI in the prior six months.  Neither the 

impression of TOKI’s success nor the statement that TOKI had not had an undisclosed material 

event was true. 

65. TOKI issued the Second Press Release on the morning of June 1, 2020.  

Consistent with Caridi’s role in TOKI’s disclosure process, a draft of the Second Press Release 

was provided to Caridi before publication.  

66. The Second Press Release “announce[d] the completion of an order of 100,000 

medical gowns to a hospital in Canada facilitated by TOKI management.”  TOKI again touted its 

supposed successful pivot into the PPE procurement space, saying, 

The Company’s US division, [TOK NV], has developed a strategic focus 
during these uncertain times to leverage its medical contacts and international 
relationships to procure medical equipment and personal protective equipment 
(PPE) to [sic] governments, municipalities, and healthcare distributors in 
Canada and the US. 

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This statement was false and misleading.  In the context of the Second Press Release—which 

touted TOKI’s procurement of medical gowns—it suggests to investors that TOK NV had 

crafted and enacted an effective plan to procure PPE in the face of the Covid-19 pandemic.4   

67. Caridi knew, or recklessly disregarded that, this was false.  To the extent TOK 

NV was purporting to leverage supposed medical contacts or purported international 

relationships to procure PPE, it had already failed and had caused the TOK Entities to incur a 

more than $11 million liability that dwarfed any other prospects the companies might have.  

Simultaneously, Caridi had siphoned off profits for himself.  Nowhere is any of this disclosed in 

the Second Press Release. 

68. The Second Press Release then quotes Caridi as saying,  

TOKI is pleased to offer life saving personal protective equipment to hospitals 
and municipalities in need.  We will continue to push forward and expedite 
the procurement of products in this ongoing fight against COVID-19.  There 
are a lot of difficulties in procuring PPE and medical equipment that we have 
overcome and are [sic] confident in our ability to provide PPE and medical 
devices for the foreseeable future. 

69. This statement was also false and misleading, as Caridi well knew or recklessly 

disregarded.  While touting the TOK Entities’ purported success in having already “overcome” 

difficulties in procuring PPE and medical equipment in the Covid-19 pandemic, Caridi’s 

statement conspicuously omits that the TOK Entities were unable to overcome those exact 

difficulties only weeks earlier in the most significant transaction in the companies’ history and 

had failed to obtain the 3 million N-95 masks for which Hospital A had paid more than $13 

million. 

 
4 Notably, one week after the Second Press Release, the Canadian entity that had purchased the 
gowns from TOKI informed Caridi that the gowns provided were unacceptable and the purchaser 
demanded to return them. 

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70. Finally, the Second Press Release stated that the Ontario Securities Commission 

had issued a new rule temporarily permitting companies to delay the filing of their annual 

audited financial statements and announced that TOKI would use this rule to delay disclosure of 

its annual financial statements for 2019.  The Second Press Release then assured TOKI’s 

investors that TOKI had already disclosed all material events that had occurred since its prior 

annual financial statements were filed in November 2019.   

71. In particular, the Second Press Release said, 

Other than as previously disclosed by the Company and herein with this press 
release, the Company confirms that there have been no material business 
developments since the date of its third-quarter interim financial statements 
that were filed on November 21, 2019, other than as a result of the impact of 
the restatement disclosed above. 

72. Caridi knew, or recklessly disregarded, that this was false and misleading.  

Contrary to the representation that “no material business developments” had occurred within 

TOKI since November 21, 2019 that TOKI had not already disclosed, TOKI’s failed deal with 

Hospital A and the resulting liability of more than $11 million had occurred during that period 

and had not been disclosed.  Among other things, this false and misleading statement suggested 

to investors that TOKI was a stable company with no material changes in its financial condition 

in the past six months despite the Covid-19 pandemic.  This was far from true. 

73. Immediately following the Second Press Release, both the daily average trading 

volume and share price for TOKI shares on the CSE and quoted on OTC Link remained elevated 

as compared to the trading volume and share price for TOKI shares in the weeks before the First 

Press Release. 

74. Read together, the TOKI Press Releases created an impression of TOKI’s 

business and condition that is inconsistent with the truth of what was happening within the TOK 

Entities.  The TOKI Press Releases conveyed to investors that, beginning in May 2020, TOKI 

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added a new and successful business line of procuring PPE, had overcome the difficulties in 

obtaining PPE in the pandemic, and that the pivot and change in strategy had resulted in the TOK 

Entities completing two successful business transactions.  What was not disclosed to investors, 

however, is that weeks before the First Press Release, the TOK Entities had failed to procure 

$13 million worth of PPE; that Caridi had enriched himself, his family, and his business 

associates with proceeds from that transaction; and that the TOK Entities were left owing 

Hospital A millions of dollars that they had neither the assets nor the revenue to repay. 

IV. Caridi Attempts to Cover Up the Failed Hospital A Transaction and His  
Self-Dealing, Which Are Revealed When Hospital A Sues the TOK Entities    

75. Beginning in March 2020, Caridi repeatedly lied to the TOK Entities’ other senior 

management and board members about the Hospital A transaction.  This deception allowed 

Caridi to misappropriate funds paid by Hospital A to TOK NV for himself and his family.  It also 

prevented certain TOKI personnel from understanding the full scope of Caridi’s scheme, 

ensuring that TOKI’s disclosures would not reveal the failed Hospital A deal or the fallout from 

that failure. 

76. During a meeting of TOKI’s Board of Directors on April 4, 2020—when Caridi 

had already agreed that the TOK Entities would deliver three million N-95 masks to Hospital A 

and Hospital A had already paid more than $13 million—Caridi told TOKI’s other board 

members that his personal consulting company was engaging in international PPE procurement 

deals and that “there might be an opportunity for [TOKI] to participate in such opportunities” in 

the future.  TOKI’s Board of Directors agreed that Caridi would “provide details of any firm 

proposals to the Board for consideration with respect to potential involvement by TOKI.”  Caridi 

knowingly, or recklessly, did not disclose that it was the TOK Entities, and not his personal 

consulting company, that had already engaged in a substantial PPE deal with Hospital A, had 

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already received payment for that deal (portions of which Caridi had paid to himself), and had 

already failed to meet their obligations in that deal. 

77. Thereafter, Caridi continued to withhold information about the Hospital A deal 

from other senior management and board members.  During an April 27, 2020, meeting of 

TOKI’s Board of Directors, the possibility of the TOK Entities’ participation in PPE 

procurement deals was raised again.  Caridi told the other board members that his personal 

consulting company was in the process of negotiating a potential PPE transaction in Québec.  

Caridi promised that “he would consider including TOKI in any revenue received from certain of 

these transactions” and that “he would not enter into any PPE transactions with any counterparty 

without the prior consent of the Board.”  Caridi knowingly, or recklessly, did not disclose that 

the Hospital A deal had already happened or that he was, at that time in late April 2020, 

negotiating a plan to repay to Hospital A the more than $13 million the TOK Entities owed. 

78. TOKI’s Board of Directors held another meeting on July 26, 2020, at which 

Caridi again obfuscated.  By that time, Caridi had agreed to the Repayment Agreement and then 

caused the TOK Entities to default on that agreement.  Also by that time, Hospital A had retained 

outside counsel which had sent demand letters to Caridi threatening to sue the TOK Entities if 

repayment was not swiftly made, and Caridi was in the process of retaining counsel to represent 

him in response to Hospital A’s threatened action.  Still, Caridi knowingly, or recklessly, did not 

tell the TOK Entities’ other senior management and board members about critical aspects of the 

discussions with Hospital A, the Repayment Agreement, the default on the Repayment 

Agreement, or the threatened lawsuit. 

79. On or around August 6, 2020, TOKI’s senior management and Board of Directors 

learned of Caridi’s failures and lies when Hospital A filed a lawsuit in the Ontario Superior 

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Court of Justice alleging fraud by TOKI, TOK NV, Caridi, the Consultant, and the Consultant’s 

company.  Hospital A’s lawsuit demanded repayment of more than $11.19 million and asked the 

Ontario Superior Court to impose a receiver over the TOK Entities and the other defendants and 

their assets. 

80. On September 2, 2020, TOKI publicly filed its annual audited financial 

statements for 2019.  In those financial statements, TOKI publicly disclosed, for the first time, 

that a lawsuit had been filed against it “related to a contract by TOK NV” and that the plaintiff 

sought “damages in the amount of $11,200,000 as well as punitive damages of CAD$500,000 

and other relief including an order appointing a receiver/manager over all the assets, undertaking, 

and property of TOKI.”  TOKI’s annual financial statements warned investors that TOKI may 

not continue as a going concern due to, among other things, this litigation against it. 

81. On September 22, 2020, TOKI filed interim financial statements for the three 

months ended March 31, 2020.  In the interim financial statements, TOKI disclosed, for the first 

time, that it had incurred a “contract liability” of more than $12 million.  This reflected the TOK 

Entities’ unpaid debt to Hospital A.  TOKI’s interim financial statements also disclosed that 

TOKI had earned no revenue from the Hospital A deal. 

82. On December 16, 2020, the Ontario Superior Court granted Hospital A’s request 

for an injunction and appointed a receiver over TOK NV’s business.  The receiver later 

determined that all masks the TOK Entities had purchased with funds from Hospital A had a 

value of approximately $200,000. 

83. On March 25, 2021, TOKI reached a settlement with Hospital A pursuant to 

which TOKI agreed to, among other things, assign to Hospital A all of its rights, title, and 

interest in TOK NV and its claims against Caridi, Consultant, and Company B. 

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FIRST CLAIM FOR RELIEF 
Violations of Exchange Act Section 10(b) and Rule 10b-5 Thereunder 

84. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 83. 

85. Defendant, directly or indirectly, in connection with the purchase or sale of 

securities, by the use of means or instrumentalities of interstate commerce, or the mails, or the 

facilities of a national securities exchange, knowingly or recklessly (a) employed one or more 

devices, schemes, or artifices to defraud, (b) made one or more untrue statements of a material 

fact or omitted to state one or more material facts necessary in order to make the statements 

made, in light of the circumstances under which they were made, not misleading, and/or 

(c) engaged in one or more acts, practices, or courses of business which operated or would 

operate as a fraud or deceit upon other persons. 

86. By reason of the foregoing, Defendant, directly or indirectly, has violated and, 

unless enjoined, will again 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]. 

SECOND CLAIM FOR RELIEF 
Aiding and Abetting Violations of  

Exchange Act Section 10(b) and Rule 10b-5(b) Thereunder 

87. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 83. 

88. As alleged above, TOKI violated Exchange Act Section 10(b) [15 U.S.C. § 

78j(b)] and Rule 10b-5(b) [17 C.F.R. § 240.10b-5(b)] thereunder, by, directly or indirectly, in 

connection with the purchase or sale of securities, and by the use of means or instrumentalities of 

interstate commerce, or the mails, or the facilities of a national securities exchange, knowingly or 

recklessly making one or more untrue statements of a material fact or omitting to state one or 

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more material facts necessary in order to make the statements made, in light of the circumstances 

under which they were made, not misleading. 

89. Defendant knowingly or recklessly provided substantial assistance to TOKI with 

respect to its violations of Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5(b) 

[17 C.F.R. § 240.10b-5b] thereunder. 

90. By reason of the foregoing, Defendant is liable pursuant to Exchange Act Section 

20(e) [15 U.S.C. § 78t(e)] for aiding and abetting TOKI’s violations of Exchange Act Section 

10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5(b) [17 C.F.R. § 240.10b-5(b)] thereunder and, unless 

enjoined, Defendant will again aid and abet these violations. 

PRAYER FOR RELIEF 
 

 WHEREFORE, the Commission respectfully requests that the Court enter a Final 

Judgment: 

I. 

Finding that Defendant committed the violations alleged in this Complaint; 

II. 

Permanently enjoining Defendant from violating, directly or indirectly, 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];  

III. 

Ordering Defendant to disgorge all ill-gotten gains and/or unjust enrichment received 

directly or indirectly, with pre-judgment interest thereon, as a result of the alleged violations, 

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

78u(d)(7)]; 

 

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IV. 

Ordering Defendant to pay civil monetary penalties under Section 21(d)(3) of the 

Exchange Act [15 U.S.C. § 78u(d)(3)];  

V. 

Permanently prohibiting Defendant from acting as an officer or director of a public 

company pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)]; 

VI. 

Permanently prohibiting Defendant from participating in any offering of any penny stock 

pursuant to Section 21(d)(6) of the Exchange Act [15 U.S.C. § 78u(d)(6)]; and 

VII. 

Granting any other and further relief this Court may deem just and proper. 

 
JURY DEMAND 

The Commission demands trial by jury. 

Dated: New York, New York 
September 22, 2023 

/s Antonia M. Apps                     . 
ANTONIA M. APPS 
REGIONAL DIRECTOR 
Thomas P. Smith, Jr. 
Adam S. Grace 
Christopher M. Colorado            
Rhonda Jung 
Brian A. Kudon 
Attorneys for Plaintiff  
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street, Suite 20-100 
New York, New York 10004-2616 
(212) 336-9143 (Colorado) 
[email protected] 

  

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