SEC suspends trading for AEHI

The federal regulatory agency raises multiple questions about the firm

The U.S Securities & Exchange Commission (SEC) has suspended trading in the securities of Alternative Energy Holdings Inc. (AEHI).

Michael S. Dicke, an SEC spokesman, confirmed to this blog that the action was taken 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 SEC said in a statement released Dec 14 . . .

“It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Alternate Energy Holdings, Inc. (“AEHI”) because of questions regarding the accuracy and adequacy of disclosures by AEHI 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 next step will be for AEHI to respond to the SEC's actions. Dicke declined to say what the SEC might or might not do next. In the past, similar SEC actions have depended on the information the firm impacted by the stop trading order provides the agency in its response. See the SEC FAQ web page in stop trade orders for additional information.

According to several wire service reports, AEHI spokesman Dan Hamilton says the company wasn't warned of the suspension, but looks forward to an opportunity to answer SEC questions.

Investigation is no surprise

Rumors have swirled around the firm and its future, since last summer, that federal and state regulatory authorities were looking into the firm’s stock and related activities, but until now there was no official confirmation of an inquiry and action.

AEHI has been tough on its anti-nuclear critics. In 2008 the firm sued the anti-nuclear Snake River Alliance for libel after the group’s director called the penny-stock firm “a scam.” It later backed off from the litigation.

The thin-skinned AEHI also filed assault and battery charges against a Twin Falls foot doctor after he handed out anti-nuclear leaflets at a public meeting protesting the proposed plant. The conviction in a local court was set aside on appeal.

Snake River Alliance response

Liz Woodruff, a policy analyst for the Snake River Alliance, told this blog Dec 14 the group feels vindicated today by the SEC’s actions.

“The Alliance and legions of concerned Idahoans have been urging state and federal securities investigators for more than two years to examine the behavior and financial practices of AEHI. This is a company that has been misinforming Idaho investors, county officials, and others almost since arriving in Idaho four years ago today.

AEHI President and CEO Don Gillispie has tried to explain away the reasons for his company’s failure to attract legitimate investors and to move this project forward, but he cannot explain away an SEC investigation. It is unfathomable that AEHI can now attract any investors with an SEC cloud over its head.”

Woodruff said the Alliance was calling on Payette County officials to suspend further consideration of AEHI’s permit application for the reactor site.

Dale Klein’s ‘no bozos’ speech

Perhaps the original warning came from now former NRC Chairman Dale Klein who in a speech delivered in June 2007 said the nuclear energy industry is not for amateurs.

My subject is something that each of the five Commissioners believe in, and have said before—which is this: owning a commercial nuclear reactor is not a business for amateurs. If the nuclear power business is treated with less than the seriousness it deserves—and people begin to think that anyone can just jump on the nuclear bandwagon—it opens up the very real danger of making the “wave” of the nuclear resurgence look more like a “bubble.” And bubbles have a tendency to pop.

It looks like AEHI’s bubble has finally popped or at least has the appearance of becoming one based on the SEC’s actions.

Prior coverage on this blog raised questions in 2007

This blog has repeatedly questioned the financial viability of AEHI’s plans. In particular, coverage here has exposed the fact that AEHI simply does not have the money, nor the prospects to obtain funding, to build an $8-10 billion nuclear power plant.

This blog has also raised questions about the viability of the sites chosen by AEHI including the original location in Owyhee County, the second location in Elmore County, and the current location in Payette County.

The Payette County location was abandoned in 2007 by a utility owned by billionaire Warren Buffet as not being economically or physically feasible. Two key reasons are water for cooling systems and the lack of transmission and distribution grids to deliver electricity from that location to customers.

Finally, while AEHI claimed it would build a KEPCO 1,400 MW reactor on the site, the design is not certified by the NRC and is years away from a safety review by the agency.

Highlights of blog coverage of AEHI

• April 2010 – Payette approves land use
• January 2010 – KEPCO reactors not certified in US
• June 2009 – AEHI gets another banker
• June 2009 – Nuke suit stopped
• September 2008 - Idaho Statesman skeptical about AEHI
  
• December 2007 – AEHI claims $150 M for start up
• April 2007 – Idaho's invisible nuclear power plant

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