NEW YORK – The CEO of Edison Nation, Christopher Ferguson, and consultant Brian McFadden confessed in Manhattan Federal Court to fabricating a $10 million order to inflate the company’s value. The pair pleaded guilty to deceiving the Financial Industry Regulatory Authority (FINRA) after a major hand sanitizer deal fell through during the pandemic’s PPE rush.
The scheme centered around a press release issued in April 2020 touting the massive order. However, a $9 million portion – the bulk of the claim – evaporated just days before the announcement. Instead of acknowledging the loss, Ferguson and McFadden allegedly forged purchase orders, attempting to maintain the illusion of success for investors.
Prosecutors say the falsified records were fed to FINRA to prop up Edison Nation’s publicly traded stock. Both men entered guilty pleas this year, with Ferguson admitting wrongdoing on January 28th and McFadden on March 16th. U.S. Attorney Jay Clayton delivered a terse statement: “There is no place for that conduct in our markets.”
The case highlights the pressure on companies to appear thriving, even during economic uncertainty, and the lengths some will go to mislead investors.
- Category: White Collar
- Source: U.S. Department of Justice
- Keywords: fraud, financial crime, securities fraud
Source: U.S. Department of Justice