Ok, I've got to admit I was starting to feel that I needed to take some time off the blog to do more research. The last two days were just too good to be followed by some regular business irregularities at AEHI.
As you remember in these two days:
- We caught AEHI's Don Gillispie publicly soliciting investors in the Investor's Business Daily using materially false statements.
- Then we showed how AEHI used materially false information to con an investor into a private placement.
- And finally we showed how Don Gillispie "forgot" to mention 116 million in unregistered stock sales in the 10-q he signed.
Enough to put anyone to jail, not even mentioning the ongoing technical manipulation and paid promotion.
But they just make it too easy, and I think I can top it one more time.
I need to give a little background so this will fully sink in: we step back and examine the core purpose of the Securities Act of 1933.
The 1933 Act has two basic objectives:
- to require that investors receive significant (or “material”) information regarding securities being offered for public sale; and
- to prohibit deceit, misrepresentations, and other fraud in the sale of securities to the public.
The mechanism that was implemented to achieve these objectives is that of registration: generally no stock can be sold to the public without being registered with the SEC. The registration statement includes the risks, the financials, background information, large shareholders and so on and needs to be filed with the SEC. The SEC checks the document and if necessary forces clarifications. If and when they're satisfied they declare the registration effective and the company files the prospectus.
After that step there is a 20 day cooling-off period before shares can actually be sold. The rationale here is to give the potential investor time to consider and weigh the information provided in the prospectus and make an informed investment decision.
With that background, what would be the most outrageous violation, both in letter and spirit, of this foundation of federal securities legislation?
I'd say if a representative of a company contacts potential retail investors directly and in public, tells them a couple of very material lies about the companies immediate prospects, offers them new unregistered securities in the company for purchase, and uses pressure tactics to close the sale, that'd be as bad as it gets. Well actually - maybe he could also say that investors might send cash to the company directly. Or maybe he could encourage the public to solicit additional investors as well.
Get a cup of coffee, sit down, relax, and read the following blog post by AEHI's Don Gillispie, CEO of Alternate Energy Holdings, which releases a newsletter to the public. He had previously sent it directly per email to potential shareholders (original here). There is no disclaimer whatsoever:
Letter to investors September 11, 2009
Posted by cleanidahoenergy in AEHI, China, Chinese nuclear energy, economic benefits, Elmore County, international, Investment news, nuclear industry.
Tags: AEHI stock, Idaho, local process, nuclear power, nuclear reactors, stockholders, AEHI, Elmore County, rural nuclear, China
I sent a letter to investors recently. Keeping people informed about our company, its goals and status is an important to us.
September 9, 2009
Dear AEHI Stockholder,
First, let me thank you so much for your investment in AEHI. The company has several nuclear projects underway including our lead site in Idaho, as well as Colorado, a desalination reactor in Mexico and a Tar Sands reactor in Canada to remove trapped oil.
We also formed Energy Neutral, Inc last year to install wind, solar and geothermal heat pumps on homes and offices to eliminate energy bills. Currently, we plan to build our first energy free model home starting the first of October to demonstrate we can construct buildings with no power bills at essentially the same price as those with energy bills. This will help launch our first energy neutral subdivision. The Energy Neutral Trade Mark name is pending as well.
The Idaho reactor, Idaho Energy Complex, is in the process of seeking local approval and we expect it by year’s end. After the Elmore County site approval was delayed due to process problems, we began looking at other sites and now have three additional Idaho counties who are extremely interested in having our plant. A little competition is always healthy. In addition, we are reviewing state lands for potential sites. After two years of educating Idaho citizens along with support from the national media and key state leaders, we have no doubt that an approved site will happen in Idaho soon and we will be adding staff locally to accommodate. We have a funding commitment from Source Capital for the site.
In July, we opened an office in Beijing, China with some investors as AEHI China to facilitate joint ventures for nuclear components among other things and large institutional investors. With the support of the Chinese government nuclear officials, we have several companies who are interested in working with us. I now travel to China every couple of months to facilitate these deals. Also, we are in the process of negotiating on the price to bring the Korean advanced reactor, APR 1400, to the US. This reactor will be lower than the cost of the other reactors currently in the US market making us more than competitive with any new source of electricity in the country. As a backup, we have begun to talk with Mitsubishi Heavy Industries about their advanced reactor as well. Further, we have a large energy trust that is willing to loan us up to $5 billion for the plant construction phase.
Lastly, in lieu of going on the London Plus Exchange as mentioned in my last letter, we are starting the process for our first public stock offering (IPO) for later this year and a move to the American Stock Exchange. This will open the stock up to institutional and more international investors by the first quarter of 2010 allowing us to leave the penny stock category.
As you can see there is plenty of positive news in the making, we will publicly announce this information as it unfolds. If you would like some more AEHI stock or have qualified investor friends, the price is at its lowest from the company at 5 cents per share with no broker fee or volume limit like in the market. This offer will end October 31 when we file for our public offering. We doubt this price will ever be available again. Also, if you have an unrestricted investment 401K or any IRA you can transfer funds to AEHI stock as well.
Just send an e-mail to email@example.com or call 208-939-9311for more information and PPM, or you can just mail a check to AEHI if an existing investor. If you are an investor you can add to your holdings for as little as $1000 or any amount above that minimum. New investors need to review the PPM.
Again, thanks for your support as we try to help the country with jobs and clean, low cost energy that will also assist us with energy independence.