Getting a zoning change in Payette County has just become the least of Alternate Energy Holding Inc.'s problems. The company looking to build a nuclear power plant in Southwest Idaho has formally been charged with fraudulently raising funds by the Securities and Exchange Commission. The agency has requested an emergency court order to freeze all of the company's assets, as well as the assets of its two top executives.
The SEC filed the charges today in federal district court in Boise, stating in a press release that the "self-described power company" has "raised millions of dollars from investors in Idaho and throughout the U.S. and Asia while fraudulently manipulating its stock price through misleading public statements that conceal the secret profits reaped by its CEO Donald L. Gillispie and Senior Vice President Jennifer Ransom."
The release goes on to state that Gillispie's claim that AEHI is an investment opportunity rivaling Exxon Mobil in terms of profit is at best questionable considering that the company has no revenue and only minimal operations.
“In light of AEHI’s ongoing efforts to raise funding while promoting itself through a daily deluge of press releases, we needed to take immediate action to get to the bottom of the company’s misleading statements,” said Marc Fagel, director of the SEC San Francisco Regional Office in the same press release. “Documents we have obtained to date indicate a scheme to personally enrich the CEO at the expense of investors.”
The SEC further asserts that AEHI's fund-raising plan was a "scheme" to drive up the price of its stock through inundating the public with press releases and manipulating stock prices by using paid stock promoters. SEC allegations also include misrepresentation of the facts by AEHI's executives, who said they hadn't sold any shares of stock while records show that both Gillispie and Ransom "have instead secretly unloaded extensive stock holdings and funneled the money back to Gillispie." According to the press release, while Gillispie claimed $133,000 in compensation in 2010, his pay out was actually six-times that amount.
At the same time the SEC filed the charges, it filed an enforcement action seeking emergency relief for investors.
This all comes just two days after the SEC placed a temporary freeze on trading of AEHI's stocks and roughly one week after the Payette County Planing and Zoning gave initial approval to change the zoning of the site AEHI was eyeing for its proposed project.