SEC: The Evidence Against AEHI

Believe it or not, there are still people on the various stock forums defending Don Gillispie and Jennifer Ransom. They claim that this is just a huge mixup.

In reality, they claim, the SEC was conned by the anti-nuclear lobby or by people seeking personal revenge against Gillispie and Ransom to pursue a baseless case against these fine people and the company that will likely rival Exxon Mobil in profits. As example check out this post titled "Standing strong in what I believe is right", singing the praises of Gillispie and Ransom.

Of course the most rational explanation is that these are promoters paid by AEHI to suppress supply or (gasp!) create demand for the shares when they will be tradable again on the grey market on 12/28/10. But we do realize that some folks might just believe in Gillispie's story so much that they really think the SEC would just suspend a stock and file a case for securities fraud because of some "baseless" allegations from the internet.

Gillispie is doing what he can to maintain this illusion - likely in order to be able to offload more of his stock to his followers when the suspension terminates. Take this quote:

“I am saddened that officials with the SEC did not follow up with me or my staff on these allegations prior to filing civil charges. Had they done so and we were given the opportunity to confront these issues, I am certain we would not be in this position today. My first priority is to this company and our stockholders. So I believe it is critical that I take this step for the welfare of AEHI and for the company’s future in the nuclear power industry”

Sure, Don. All it would have taken is one call to you and you could have clarified this whole misunderstanding...  

Well, gladly in addition to the fraud charges we now have this declaration from the SEC which lists the evidence filed with the case. Read for yourself, but they have stock account statements from Gillispie, Ransom etc, they have bank account statements of Gillispie, Ransom and their fraudulent entities, they have emails and letters originating from Gillispie, Ransom and the other players - in short they have done their homework.

So no, there's absolutely no chance that the SEC has been conned by the rabid anti-nukes.

Martin Johncox: We Can Draft Written Testimony For You

On 11/22/2010 Martin Johncox posted the following on the Waldo Real Estate blog (only cached, it's been removed since):

Thank you so much for your support in our attempt to build a nuclear power plant in Payette County. This is a long process and one in which we need you continuing help.

As you may know, we face an important hearing at 7 p.m. on Thursday, Dec. 2, before the Payette County Planning and Zoning Commission. We are applying to rezone 5,100 acres of land, a crucial preliminary step. Thanks to your help, the P and Z and county commission earlier this year recommended amending the county's comprehensive plan to allow our plant; the Dec. 2 hearing is the next important step.

The Dec. 2 hearing will be be held at the Payette County Courthouse, 1130 3rd Avenue North in Payette. If the commissioners expect a large turnout, they may move the meeting to the Payette High School Auditorium at 1500 6th Avenue South and we will keep you updated on this.

Please show your support again by attending the meeting, and by offering your public testimony in person. Our opponents will definitely be in attendance, so all the support we can muster will be greatly appreciated.

However, if you are unable to attend, you may send written testimony to commissioners. The deadline for emailed testimony is end of the day by Friday, Nov. 26. You may send the testimony to either lroyston@payettecounty.org or imachuca@payettecounty.org. If you need help with a letter please call me.

The proposed nuclear power plant will bring with it thousands of jobs, increase pay rates for the surrounding work force, improve business for hundreds of local companies, while proving a financially success venture for local investors.

But, none of this is possible without your support, so if you can, please attend the hearing and sign-up to speak, we would love to see all those seats filled with supporters.

Please forward this email to any other AEHI supporters who may also want to get involved.

Thank you,

Martin Johncox

AEHI community relations

208-658-9100

mjohncox@cableone.net

And even with that encouragement they didn't come out on top in written testimony. Maybe for the next racket you could use language along the lines of: "Please be advised we'll be submitting written testimony on your behalf unless you explicitly tell us not to". Or did that already happen? I'm counting two submissions for Gordon Chambers and John Talbot each.  

SEC Brings Fraud Charges Against Don Gillispie, Jennifer Ransom & AEHI

Unfortunately I was out yesterday and couldn't yet comment on the fraud charges the SEC brought against Don Gillispie, Jennifer Ransom and Alternate Energy Holdings (complaint here).

Needless to say I'm very happy that the SEC moved so quickly in the end and protected new investors from falling for the lies and deceptions propagated by Gillispie and his associates. Many people complain about the SEC and its capability to move quickly against penny stock fraud. But this case proves that it is very possible for the public to submit enough evidence of a fraud to get the SEC's attention.

However it's also true that the SEC needs a bullet proof case before they can move forward. And that takes time. In retrospect I like the model I've pursued in this case: disclosing evidence to the SEC via the SEC tip form and to the public via a blog in parallel. This enables the SEC to gather enough evidence while warning investors early of potential scam.

I will later show how my disclosures on this blog and on Yahoo's AEHI message board warned investors exactly of the fraudulent acts described in the SEC complaint.

Meanwhile I'll answer a couple of questions people and press have asked me:

Q: Are you Joe Weatherby?
A: No, I'm not. I didn't even get to know Joe until late in the game and we worked largely independently from each other on this project.

Q: Do you use multiple Yahoo Ids to fake conversations?
A: No, I consider that unethical and would not engage in such tactics. I did have to change my id from joe.lucid@yahoo.com to lucidlucid@ymail.com because someone with an interest to suppress my disclosures convinced Yahoo to terminate my previous Id.

Q: Tell us more about yourself? How can we trust your claims if we don't know who you are?
A: I try to present information with pointers to all sources so that anybody can follow my reasoning. I don't think more information about my identity would be helpful.

Q: Do you have a financial interest in the demise of AEHI?
A: I do have a short position and that initially kept my attention on this case. Over time though the fun of solving a puzzle became the dominant factor in my motivation. I do expect my position in AEHI to become profitable. However the cost of maintaining it has been really high, so it's not the home run you might expect. Overall my behavior of allocating so much time to AEHI was economically irrational.

Q: Isn't shorting a stock and publishing negative information about it illegal and unethical?
A: Not at all. It's not illegal unless you knowingly publish false or misleading information. Since the short side has the motivation to research the company deeply and to unveil its business practices it counteracts fraudulent and misleading promotions of the company. Therefore the short side actually works to protect investors interests in the long run.

Q: What's next for you?

A: This has been tremendously entertaining for me. One thing is certain: I'll continue to short and expose frauds. I've yet to figure out how to best take the experience from this case and apply it to future frauds. I know I want to get to a more scalable model. Stay tuned...

Joe Lucid Busts Martin Johncox And AEHI Again

Martin Johncox

Ok, given that the SEC has suspended trading of AEHI this morning there should be no more doubt about the true nature of AEHI and its associates. However in the interest of full disclosure I do want to share the following exchange between Payette County's planning and zoning commission and myself today.

See AEHI's blog entry titled "Joe Lucid fraud testimony uncovered" for some outrageous commentary which really only left the conclusion that AEHI's management was in a state of panic. Excerpt (authored by Martin Johncox):

"I’m told Payette County has rejected Joe Lucid’s testimony because he’s not using his real name. That is very gratifying, as Lucid is a particularly toxic individual who has persistently spread lies about AEHI, even harassing individual investors whose emails he harvested from public testimony. Lucid wants people to view him as a crusader, but it is clear to me his only motive is to enrich himself through stock shorting, a controversial practice to profit from a falling stock price."

Update: Johncox is now trying to paddle back. Don't believe it. This guys is guilty.

Then enjoy the following exchange:

RE: AEHI Written Testimony Joe Lucid

From:	Lindsey N. Royston <lroyston@payettecounty.org> Add to Contacts
To:	Lucid Lucid <lucidlucid@ymail.com>
Cc:	Isnarda Machuca <imachuca@payettecounty.org>

---

Mr. Lucid,

Your written testimony was included into the record and can be viewed and verified athttp://pnz.claypeak.com. However, per Isnarda Machuca-Rodriguez’s emailed notice to you, the zip file you also attached was not included as we could not open it. It was sent to our IT Department who could not open it either due to size or corrupted contents. You are more than welcome to send copies of the documents to:

Payette County P&Z

1130 3^rd Ave. N. Rm 107

Payette ID 83661

Anything received will be included into to the record, along with all documents already received to date, and forwarded to the Board of County Commissioners who will ultimately make the final decision on the applications requested by AEHI.

Lindsey Royston

Administrative Assistant

Planning & Zoning

Payette County

From: Lucid Lucid [mailto:lucidlucid@ymail.com]
Sent: Tuesday, December 14, 2010 7:03 AM
To: Lindsey N. Royston; Isnarda Machuca
Subject: AEHI Written Testimony Joe Lucid

Hi,

I submitted written testimony about some of my concerns with alternate energy holdings recently. Yesterday the company called me a liar and said that my testimony had been rejected by Payette County (http://aehi.wordpress.com/2010/12/13/joe-lucid-fraud-testimony-uncovered/).

Could you tell me whether my testimony has really been rejected and if yes for what reason?

Thanks

Joe Lucid

SEC suspends AEHI trading!

http://sec.gov/litigation/suspensions/20...

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 63535 / December 14, 2010

The Securities and Exchange Commission (“Commission”) announced the temporary suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934 (the “Exchange Act”), of trading in the securities of Alternate Energy Holdings, Inc. (“AEHI”)), of Eagle, Idaho at 9:30 a.m. EST on December 14, 2010, and terminating at 11:59 p.m. EST on December 28, 2010.

The Commission temporarily suspended trading in the securities of AEHI because of questions that have been raised about the accuracy and adequacy of publicly disseminated information concerning, among other things, the stock sales of certain AEHI officers, the status and viability of funding to build a nuclear reactor, and executive compensation.

The Commission cautions brokers, dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the company.

Further, brokers and dealers should be alert to the fact that, pursuant to Rule 15c2-11 under the Exchange Act, at the termination of the trading suspension, no quotation may be entered unless and until they have strictly complied with all of the provisions of the rule. If any broker or dealer has any questions as to whether or not he has complied with the rule, he should not enter any quotation but immediately contact the staff in the Division of Trading and Markets, Office of Interpretation and Guidance, at (202) 551-5777.  If any broker or dealer is uncertain as to what is required by Rule 15c2-11, he should refrain from entering quotations relating to AEHI securities until such time as he has familiarized himself with the rule and is certain that all of its provisions have been met. If any broker or dealer enters any quotation which is in violation of the rule, the Commission will consider the need for prompt enforcement action.

If any broker, dealer or other person has any information which may relate to this matter, he should contact Michael S. Dicke or Tracy L. Davis of the San Francisco Regional Office of the Securities and Exchange Commission at (415) 705-2500.

AEHI Insiders In Panic Mode

Well, we kind of saw it coming: we've covered the actions of AEHI in quite some level of detail here on the lucidaehi.blogspot.com blog:

We showed how AEHI lied about $3B in profits, how they lied about their credit line size, how they lied about the timing of their credit line, how they lied about never being late on a SEC filing, how Gillispie lied about his MIT degree, about his role at Browns Ferry, about his "Business man of the year" award.

We demonstrated how AEHI technically manipulates stock prices, how they pay 3rd parties to encourage individual investors to buy their stock, how Gillispie claimed to be the next Exxon Mobil, how AEHI violated the Securities Act of 1938 by soliciting the public for unregistered offerings and using materially fraudulent statements to entice retail investors to buy.

We showed that AEHI tried to hide 116M in unregistered stock sales from investors, how Gillispie solicited retail investors to purchase stock in AEHI using pressure sales tactics, how he's previously stated that the plan he's currently selling to Payette County can't ever be approved by the NRC and finally how he's not aware of basic trends in nuclear development and regulation.

You'd think by now they should be thinking very hard about what to do. Do they quickly sell remaining insider shares into the market to make the last few bucks before regulators strike? Do they leave the country to avoid prosecution? Do they move to a different state to hope for less scrutiny?

But no! AEHI is now officially in full blown PANIC mode, like a deer in the headlights. Their response on their official blog (hi there Martin Johncox): a post about me using my name in testimony. Title: "Joe Lucid fraud testimony uncovered". Seriously? That's how you think you'll calm your investors? Anybody ever hear of a company even posting anything like that on their blog? In defense of all the transgressions we documented very clearly here for all to see?

I didn't think so!

It's got to be hard though. They can't sue us because they're a fraudulent operation. And they would lose just as they did against the Snake River Alliance. And they can't silence us because of what communication is today. Doesn't look too good...

Sorry, Don.

But what do you expect from a guy who can't even be honest about his hair!

Greenfield Sites: AEHI Not Tracking Nuclear Industry

I've been mulling over AEHI's latest press release:

First look at the title ("AEHI Receives Final P & Z Approval for Proposed Idaho Nuclear Power Plant"). That sounds to me as if some final approval had been received, at least for the rezoning request. Not so, this is only the recommendation from the Planning and Zoning Commission to the County Commissioners who will have another public meeting and a vote next year. It's also hardly final since the recommendation can (and likely will) be appealed.

Just so you know, after the County Commissioners make a decision (which also can be appealed) the state needs to approve the plan. So we're a good distance away from local and state approval.

But now lets look at the subtitle ("Nationally Significant as First Proposed U.S. Green Field Site in 33 Years"). Hmm, that's a bit surprising! There are a bunch of other proposed US greenfield nuclear power plants:

For example there's Amarillo Power which has proposed a greenfield site in Texas. No NRC application yet. Then there's Levy County Station which already has state approval and a submitted COLA application. And lets not forget Victoria County Station, which had a COLA application submitted, but has now changed its approach and has an ESP application pending with the NRC. At least the last two are much further in the process than AEHI!

If we assume (boldly!) that this press release was put together in good faith, we do have to wonder how AEHI's leadership can be so ignorant of current trends in the nuclear industry. I mean, these are people about whom Martin Johncox has this to say:

"Every member of AEHI’s Board of Directors, Mr. Gillispie and even advisors to the board all have at least 40 years of experience in the nuclear industry, which includes building, operating, and maintaining nuclear power plants and utilities. Their reputations have been vetted by national and international governments, which is required to work at their level in the industry."

Which reminds me of another interesting slip-up of Gillispie on his blog:

"Every company that has undertaken the NRC application process has successfully completed it and received a construction/operation license."

As we've heard this claim has also been used when selling shares to investors. Now check out the following NRC FAQ. Check out 1.1.8:

"1.1.8 Has the NRC ever denied an application for a license?

During the 1980s, the NRC refused to issue operating licenses for the William H. Zimmer Nuclear Power Station, in Ohio.  The NRC issued this ruling based on a charge that the plant had failed to meet construction and safety codes.  Because of the high cost of completing the Zimmer facility and the uncertainty that it would eventually meet the Federal regulations, the utility, Cincinnati Gas and Electric, decided not to continue to pursue an operating license.  In other cases, applicants elected to amend or revise their requests for approval in order to receive a license from the NRC and its predecessor, the Atomic Energy Commission."

Hmm, strange.

But hey, we're talking about a guy who can't remember which reactor unit he worked on and in which capacity.

And who can't even be honest about his hair!