Bankrupt energy company probed
Got $100M in federal stimulus
Securities regulators are investigating a green energy company that won a $100 million federal grant under President Obama’s stimulus program, only to end up bankrupt this fall.
According to bankruptcy court documents filed this week, San Francisco-based Ecotality is being investigated by the Financial Industry Regulatory Authority, the independent, industry- financed securities regulator that can levy fines and refers hundreds of cases of fraud and insider trading each year to the Securities and Exchange Commission.
The probe came to light in invoices attached to a more than $1 million bill submitted by a law firm working on Ecotality’s bankruptcy case. One of the hourly legal charges included notes, “FINRA questions in trading investigation.”
Neither officials from FINRA nor a bankruptcy lawyer for the company responded to messages Wednesday.
The company had already disclosed in a regulatory filings that it had received subpoenas from the SEC “in connection with a fact-finding inquiry as to trading in shares of common stock” from August 2008 through August 2009. But that filing made no mention of a probe.
The SEC subpoena probe appears to relate to trading leading up to when Ecotality won $100 million from the Energy Department to deploy charging stations for electric cars in the U.S. At the time, the company had big plans.
“Ecotality is committed to enhancing America’s energy independence, accelerating the market acceptance of electric transportation and supporting President Obama’s goals for job creation and advanced electric drive vehicle deployment,” Jonathan Read, then CEO of Ecotality, said in an August 2009 announcement. He resigned in September 2012.
Last month, three companies announced plans to acquire some of Ecotality’s prime assets, including a $3.3 million purchase of the company’s network of charging stations by Floridabased rival The Car Charging Group.
The energy company’s demise has drawn comparisons to the bankrupt solar panel maker Solyndra, which collapsed owing taxpayers more than $500 million in federal loans.
Ecotality, which lists just four employees, filed monthly operating reports in the bankruptcy case on Wednesday showing total assets of just over $5 million.
“The company has sold all assets as of 10/15/13 and is in the process of winding down operations,” the report states.
The billing records in the Ecotality case don’t specify the nature of the FINRA investigation, but the invoices make clear that regulators have sought board meeting minutes among other records.
This week, Nasdaq delisted Ecotality, whose stock was suspended in September. The company went bankrupt on Sept. 16.
Meanwhile, a recent audit by the Energy Department’s inspector general has raised questions about whether department officials failed to report concerns about the company in the months before it went broke.