Advanced Equities, an investment and brokerage firm that has helped raise hundreds of millions of dollars for cleantech firms in recent years, could see its CEO and co-founder resign as early as this week, according to a report in DowJones VentureWire. Dwight Badger, who co-founded the firm in 1999, will reportedly resign at the request of the board of directors, and an announcement could be made as early as this week about his departure.
Advanced Equities has raised funds for firms like Fisker Automotive and Bloom Energy, which are also backed by venture firms like Kleiner Perkins and New Enterprise Associates. Advanced Equities targets investments from high net worth individuals, and the funds often times have gone to support later stage companies trying to scale up manufacturing.
But last month a Financial Industry Regulatory Authority arbitration panel found that Badger and co-founder Keith Daubenspeck were liable for breach of contract and failure to pay commissions to a former broker, reports DowJones VentureWire. In addition, Advanced Equities is also being investigated for fundraising connected to a private offering. Both of these incidents are part of the reason for the likely resignation, according to the report.
In February an investor in Fisker Automotive, Daniel Wray, filed a lawsuit against Fisker and Advanced Equities alleging that he “suffered significant money damages at the hands of Fisker and Advanced Equities,” because of a “corporate securities bait-and-switch,” a breach of fiduciary duty, and fraud in connection to sales of Fisker securities. I’m not sure the status of that suit, but will update this when I know more.
This article in 2008 in Forbes described Advanced Equities as “a late-stage venture funding outfit” “foisting junky startups on investors–much to the benefit of the Sand Hill Road crowd.”