The agency alleges company officers used private placements to mislead investors
The Associated Press reports that the Securities & Exchange Commission has amended the agency's claims against would-be Idaho nuclear plant developer Don Gillispie, alleging in a new complaint that the company's leaders defrauded investors.
In the new filing, SEC attorneys amended the complaint against AEHI emphasizing their claims that Chief Executive Officer Don Gillispie (right) misled investors, lied about paying stock promoters and didn't accurately disclose his or his employees' pay.
Gillispie has denied wrongdoing. His attorney did not respond to inquiries from the wire service.
Full text of the SEC complain here. http://tinyurl.com/SECAEHIJul11
Snake River Alliance revives “scam” label for AEHI
A few years ago the Snake River Alliance almost found itself in court after calling AEHI a “scam.” Company CEO Don Dillispie filed a “slap suit” claiming defamation, but the SRA’s leadership backed off and AEHI dropped the case.
With the latest filing by the SEC, the SRA has rediscovered the label, well almost. Here’s what Liz Woodruff, SRA’s Director, has to say.
“As if things couldn’t get any worse for AEHI, the nation’s securities watchdog agency continues to expose this company for the sham that it is. If there was ever any doubt about the integrity of this company and its prolonged scam on Idahoans and investors worldwide, this new complaint puts them to rest.”
“The list of new charges is extensive. These new allegations come when, incredibly, AEHI stock can still be purchased. According to these charges, AEHI is not in the business of building Idaho’s first privately owned nuclear reactor. It is in the business of separating Idahoans from their hard-earned money.”
Impact on other nuclear programs in Idaho
AEHI’s now tarnished reputation has been a pain in the neck for the Idaho National Laboratory, which conducts nuclear energy R&D work for the federal government.
An anonymous source familiar with the issues at the Idaho lab told this blog this week via email that having a firm like AEHI in Idaho has often challenged INL's public image.
"We all too often have to defend our own programs and the nuclear industry because of their corrupt tactics, rhetoric, and confusing promises. The sooner AEHI goes away the better."
The Idaho lab is developing technologies for future nuclear reactors, but it is unlikely any of them will actually be built in Idaho. For instance, the Next Generation Nuclear Plant, a 300 MW HTGR concept, will likely be built at a customer site.
The timeline for it keeps getting stretched out as the Department of Energy seems focused on LWR concepts for small modular reactors (SMRs) and has raised the cost sharing requirements to access federal funds.
Several other private efforts, not associated with the lab, are investigating options to build an SMR in Idaho.
The biggest nuclear project in the state, outside the lab, is Areva's planned $2.4 billion uranium enrichment plant to be built 18 miles west of Idaho Falls, ID. An NRC license for the Eagle Rock Enrichment Plant is expected later this year. Construction is expected to start in Spring 2012.
History of the investigation
This is the second time the SEC has tried to shut AEHI down. It failed in its first attempt last December. The U.S. District Court in Boise tossed the SEC’s first round of complaints.
Last February, a federal judge lifted a previous freeze on Alternate Energy Holdings Inc.'s assets, but required the company to report expenditures of over $2,500 to the Securities and Exchange Commission.
Separately, the Payette County Commissioners have approved a land use change for AEHI’s proposed nuclear power plant. They seem oblivious to the investor issues.
The site is near one abandoned by MidAmerican, a Warren Buffet company, because of its remote location, lack of transmission lines, and poor transportation infrastructure. Buffets’s firm also quit the project because the costs of building a Mitsubishi 1,700 MW reactor weren’t defined and the design had not been certified by the NRC.
Prior coverage on this blog
Readers of this list should be aware that I have posted articles on my blog since 2007 calling into question the technical feasibility and financial basis for the project. However, I have not had any communication with the SEC about the company.
In June 2007 this blog described the “no bozos” paradigm of then NRC chairman Dale Klein who said the nuclear energy industry has no room for amateurs. In October 2007 this blog published its now world famous “baloney test for new nuclear builds.”
Based on these principles, I have written that there are inconsistencies between what AEHI claims and the facts.
For instance, AEHI claimed the NRC was on a fast track to approve the design certification of a South Korean 1,400 MW reactor. In fact, in preliminary discussions in Fall 2009, the NRC told the South Koreans it could be two years, or longer, before the agency would even consider having serious pre-application discussions with the vendor. I cited and linked to NRC documents in the Adams system.
Also, I pointed out in previous blog posts the massive investment that would be needed to upgrade the grid in Idaho to take the power from the plant and deliver it to customers elsewhere in the Pacific northwest.
The firm has gone through three so-called investment bankers. None have raised any money for the firm.
The second “banker” took $25,000 from AEHI as a finder’s fee and spent it on ski chalet rentals and parties. The 29 year old banker subsequently settled with regulatory agencies in a plea deal admitting to selling unregistered securities in Utah.
While AEHI was not a party to that proceeding, it didn’t do much for investor confidence that the company would be able to raise the six billion needed to build the reactor.
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