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Summary:

Investment group Advanced Equities has agreed to pay $1 million to settle charges that it misled investors while raising funds for an alternative energy company in Silicon Valley back in 2009 and 2010. That company in question is reportedly fuel cell maker Bloom Energy.

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Investment firm Advanced Equities — which has raised money for cleantech companies like Bloom Energy, Fisker Automotive and SolFocus — has agreed to pay $1 million to settle charges by the Security and Exchange Commission that the firm misled investors around a fund raise for a Valley alternative energy company back in 2009 and 2010. While the SEC doesn’t name the company that Advanced Equities misled investors over, Crain’s Chicago Business and Dow Jones have reported that the company is fuel cell maker Bloom Energy.

The SEC says that Advanced Equities’ co-founder Dwight Badger over hyped the company to potential investors, and over stated the amount of funds the company had, as well as its backlog of orders. Badger also allegedly said the company had been given a loan from the U.S. Department of Energy for over $250 million, but the company had actually only applied for a $96.8 million loan.

The SEC also charged Advanced Equities’ co-founder Keith Daubenspeck with failing to stop investors from being misled — he allegedly listened in on calls where Badger made misstatements and didn’t correct the misstatements. Both Badger and Daubenspeck were also personally fined and Badger is barred for one year from associating with any broker. In addition the company agreed to hire an independent consultant to review its sales policies and procedures.

The firm and its co-founders settled the charges without admitting any guilt. Badger, who co-founded the firm in 1999, reportedly already resigned from Advanced Equities at the request of the board of directors.

Bloom Energy makes fuel cells that take fuel (natural gas or biogas) and combine it with oxygen and other chemicals to create an electrochemical reaction that produces electricity. The fuel cells deliver distributed power on site at a building, and can have a lower carbon footprint than grid power. If Bloom closes this recently reported round of $150 million, it will have raised at least $800 million over its lifetime, and investors include New Enterprise Associates, Kleiner Perkins, DAG Ventures and GSV Capital.

Bloom Energy didn’t respond to requests for comment.

  1. I presume they employed the special-purpose investment vehicle in this case as well? How is this any different from what Goldman Sachs did with FB in Jan ’11?

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