Seeking Alpha, a U.S. financial content service provider, has recently revealed ForceField Energy, a LED installation and energy efficient lighting company engagement in misleading paid stock promotion.

The company started off as a Chinese reverse merger known as SunSi, which was focused on manufacturing a chemical used in polysilicon production in China. According to Seeking Alpha, SunSi is not a shell company, and is still being managed by ForceField management David Natan and Richard St. Julien. ForceField Energy’s more recent business, has been as a distributor of LED lighting for a single manufacturer in China.

The report noted the company had been using paid-for stock promotion to target retail investors, despite institutional investment in the company totaling to just 1% of outstanding shares. The cash-strapped company has been in dire need to sell stocks in the near term. It has launched a series of paid-promotions to make its stock more appealing to investors.

The report revealed the company had turned to Dream Team promotion, and had stock promotion content written by Tom Meyer and John Mylant. Other promotions took the form on financial news websites, such as Goldman Small Cap Research, Small Cap Street, press releases posted as news articles on MarketWatch, paid e-mail promotions, and even on Yahoo message boards.

The promotions drove the company stock to an all-time high, which has increased sales volume, which the cash-strapped company will take full advantage of. ForceField has not filed its annual report (Form 10-K):

“As of its most recent financials, ForceField had just $500,000 in cash. It had been reported that ForceField had sold its interest in TransPacific Energy for $2.0 million. However, it was the case that ForceField only received $50,000 in cash. The remaining $1,950,000 was in fact just hypothetical. The "buyer" simply returned its shares of ForceField (which had been owned by the buyer) which were then simply cancelled by ForceField. The cancelled shares are worth nothing and cannot be resold. As a result, ForceField only received $50,000 not $2.0 million.”

The investigative report also linked top three ForceField management members to fraudulent activities in the past. Notably most of the companies ForceField CEO Natan has invested in are now bankrupt. He was also notoriously involved inSFBC company scandal for recruiting illegal immigrants as clinical drug trial subjects.

According to fraud complaint filed in the District Court of New Jersey, SFBC mislead investors that its new state of the art facility would boost company revenues. In reality, the building was nothing more than a structurally unstable former Holiday Inn that Miami Dade County Unsafe Structures Board has ordered to be demolished.

The fraud case goes on to state that:

“SFBC risked its reputation and recruitment ability by utilizing a variety of unethical and dangerous practices that severely compromised the integrity of the drug trials conducted by the Company. For example, as detailed below, SFBC violated applicable minimum waiting requirements, used deceptive payment schemes to decrease the likelihood that a participant would report adverse reactions to the drugs being tested, failed to put into place adequate controls to prevent participants from applying to concurrent drug trials at other facilities, and failed to ensure that participants - the majority of whom are low-income individuals who speak English, if at all, as a second language - provided the required ;informed consent.’”

Seeking Alpha projects ForceField’s shares will lose 30%-40% of its value in the short term.