Advanced Equities Investors May Have Securities Arbitration Claim

by InvestorLawyers on October 4, 2012

in Arbitration,FINRA,Private Placements,SEC,Securities Fraud

Securities arbitration lawyers are currently investigating claims on behalf of Advanced Equities customers who invested in what reportedly was known as Bloom Energy, a Silicon Valley alternative energy company. On September 18, the Securities and Exchange Commission charged co-founders Keith G. Daubenspeck and Dwight O. Badger, a FINRA registered broker-dealer, and Advanced Equities Inc. in connection with the private offerings of an alternative energy company offered in 2009 and 2010. According to the allegations, Advanced Equities misled investors and failed to adequately supervise the offerings in two private equity offerings.

Advanced Equities Investors May Have Securities Arbitration Claim

Reportedly, Daubenspeck is the parent company’s board chairman and Badger was the parent company’s former chief executive. Together, they founded Advanced Equities. The SEC has stated that the sales effort was led by Badger, who misstated facts about the finances of the energy company, and Daubenspeck failed to correct these misstatements, which resulted in a failure to adequately supervise.

One of these misstatements, according to the SEC and stock fraud lawyers, occurred in the 2009 offering when Badger said the company had order backlogs amounting to more than $2 billion when, in fact, this amount never exceeded $42 million. In addition, he said a national grocery store chain had placed a $1 billion order when, in reality, it was only a $2 million order, with a non-binding letter of intent for future purchases, that had been placed by the store. Badger also stated that a U.S. Department of Energy loan had been granted to the company that exceeded $250 million, but only a $96.8 million loan had been applied for. This loan application misstatement was repeated in 2010 during the follow-up offering. Reportedly, Daubenspeck, when hearing these misstatements during his participation in at least two internal sales calls, remained silent. No reasonable corrections were made despite these red flags and, as a result, an obvious risk of investors receiving this false information went unchecked. According to securities arbitration lawyers, when misstatements like this are made in an internal sales call to brokers, it is likely that the brokers will unknowingly pass this false information to investors.

If you are a customer of Advanced Equities and purchased Bloom Energy investments or other private equity offerings, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a stock fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

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