SEC v. Michael Caridi, No. LR-26213, District of Connecticut (Jan. 8, 2025) — Press Release
raw: Michael Caridi
Michael Caridi, No. 3:23-cv-01243 (Jan. 8, 2025)
summary
Michael Caridi, former Chairman of TOKI, obtained a final judgment for issuing fraudulent press releases regarding a PPE pivot to conceal a failed mask contract and $1 million in misappropriated funds.
paragraph
Michael Caridi faced SEC charges for orchestrating fraudulent press releases to mask an $11 million liability and a failed N-95 mask contract. He was ordered to pay $895,972 in disgorgement and a $180,000 civil penalty for violating Section 10(b) of the Securities Exchange Act. The judgment also imposes a seven-year bar from serving as a public company officer or director and a ban on penny stock participation.
narrative
The SEC obtained a final judgment against Michael Caridi, former Chairman of Tree of Knowledge International Corp. (TOKI), for issuing fraudulent press releases regarding the company's pivot into the PPE market. Caridi failed to disclose that TOKI had failed to deliver three million N-95 masks to a Canadian hospital, leaving the company with an $11 million liability. Furthermore, Caridi misappropriated over $1 million from that failed contract, even after promising the hospital a refund. To resolve the charges of violating Section 10(b) and Rule 10b-5, Caridi consented to a seven-year officer and director bar and a penny stock bar. He must also pay $180,000 in civil penalties and $895,972 in disgorgement. This disgorgement amount is subject to offsets from any payments made to satisfy a related private litigation filed by the hospital.
Classified corporate-fraud(confidence 100%). EDGAR detection: forms 10-K/10-Q/8-K· recall 56% / precision 8%. detection rule →
Parties
PACHECO3M COMPANY
Keywords
caridimichael cariditokisecurities exchangesechospitalmichaelreleasesexchange commissionofficer directorregional underunder supervisionsecuritiesexchangelitigation
Exhibits & Attached Documents (1)
Extracted insights
Dollar amounts 4
- $11.00M $11 million $10M–$100M
- $1.00M $1 million $1M–$10M
- $896K $895,972 $100K–$1M
- $180K $180,000 $100K–$1M
Entities 7
- person final judgment
- person fraudulent press releases
- person michael caridi
- agency Securities and Exchange Commission
- organization Securities and Exchange Commission
- court u.s. district court
- organization U.S. District Court
Triples 10
- Securities And Exchange Commission Obtains Final Judgment
- Michael Caridi Acted As Chairman Of Toki
- Toki Issued Fraudulent Press Releases
- Michael Caridi Misappropriated $1 Million
- Toki Had $11 Million Liability
- Securities And Exchange Commission Charged Michael Caridi
- Michael Caridi Consented To Final Judgment
- U.S. District Court Entered Final Judgment
- Michael Caridi Paid $180,000 Civil Penalty
- Michael Caridi Paid $895,972 Disgorgement
PDF (from attached: complaint)
Text layers
Extracted body text (2,401c)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26213 / January 8, 2025 Securities and Exchange Commission v. Michael Caridi, No. 3:23-cv-01243 (D. Conn. filed Sept. 22, 2023) SEC Obtains Final Judgment Against Former Officer and Director For Fraudulent Statements in Press Releases On January 2, 2025, the U.S. District Court for the District of Connecticut entered a final judgment by consent against Michael Caridi, whom the SEC had charged in connection with the issuance of fraudulent press releases by Tree of Knowledge International Corp. (“TOKI”). According to the SEC’s complaint, Caridi acting as Chairman of TOKI’s board of directors, assisted TOKI, which had not previously been in the business of supplying Personal Protective Equipment (“PPE”), in issuing two press releases touting TOKI’s successful pivot into being a PPE provider. The SEC’s complaint alleges that the press releases did not inform the public that Caridi and TOKI had previously failed to deliver three million medical grade NIOSH certified N-95 masks to a Canadian hospital pursuant to a contract with that hospital. In addition, as alleged in the complaint, TOKI had an $11 million liability to the hospital, and Caridi had misappropriated over $1 million from the unperformed contract, which included amounts taken after he had already promised the hospital a refund that TOKI did not have the resources to pay. Without admitting or denying the allegations in the SEC’s complaint, Caridi consented to the entry of a final judgment that permanently enjoined him from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; barred him from serving as of officer and director of a public company for seven years; barred him from participating in an offering of penny stock; ordered him to pay a civil penalty of $180,000; and ordered him to pay disgorgement of $895,972, to be offset in an amount equal to any payments Caridi makes to satisfy a judgment awarded against Caridi in a related private litigation filed by the hospital. The SEC's litigation was led by Christopher M. Colorado of the New York Regional Office, under the supervision of Preethi Krishnamurthy. The investigation was conducted by Rhonda L. Jung, Brian Kudon, Kenneth Gottlieb, Melissa Coppola, and Adam S. Grace, all of the New York Regional Office, under the supervision of Thomas P. Smith, Jr.
OCR text (2,401c · html-text · 99% conf)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26213 / January 8, 2025 Securities and Exchange Commission v. Michael Caridi, No. 3:23-cv-01243 (D. Conn. filed Sept. 22, 2023) SEC Obtains Final Judgment Against Former Officer and Director For Fraudulent Statements in Press Releases On January 2, 2025, the U.S. District Court for the District of Connecticut entered a final judgment by consent against Michael Caridi, whom the SEC had charged in connection with the issuance of fraudulent press releases by Tree of Knowledge International Corp. (“TOKI”). According to the SEC’s complaint, Caridi acting as Chairman of TOKI’s board of directors, assisted TOKI, which had not previously been in the business of supplying Personal Protective Equipment (“PPE”), in issuing two press releases touting TOKI’s successful pivot into being a PPE provider. The SEC’s complaint alleges that the press releases did not inform the public that Caridi and TOKI had previously failed to deliver three million medical grade NIOSH certified N-95 masks to a Canadian hospital pursuant to a contract with that hospital. In addition, as alleged in the complaint, TOKI had an $11 million liability to the hospital, and Caridi had misappropriated over $1 million from the unperformed contract, which included amounts taken after he had already promised the hospital a refund that TOKI did not have the resources to pay. Without admitting or denying the allegations in the SEC’s complaint, Caridi consented to the entry of a final judgment that permanently enjoined him from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; barred him from serving as of officer and director of a public company for seven years; barred him from participating in an offering of penny stock; ordered him to pay a civil penalty of $180,000; and ordered him to pay disgorgement of $895,972, to be offset in an amount equal to any payments Caridi makes to satisfy a judgment awarded against Caridi in a related private litigation filed by the hospital. The SEC's litigation was led by Christopher M. Colorado of the New York Regional Office, under the supervision of Preethi Krishnamurthy. The investigation was conducted by Rhonda L. Jung, Brian Kudon, Kenneth Gottlieb, Melissa Coppola, and Adam S. Grace, all of the New York Regional Office, under the supervision of Thomas P. Smith, Jr.