Idaho Nuke Company in Trouble -- With the SEC

This illustration is used for commentary purposes under the fair use doctrine.

Things just don’t look good for AEHI.

The Securities and Exchange Commission is charging Eagle, Idaho-based Alternative Energy Holdings, Inc., and two of its officers, for farting around with money and stocks rather than using investor money to forward plans to build two nuclear power plants in Payette County. The company has been told to temporarily halt trading of its stock until Dec. 28.

No, “farting around” isn’t official SEC parlance, but that’s basically what it boils down to, per the Idaho Statesman.

All charges right now are alleged charges, of course, and at this point it’s unclear what impact – if any – the investigation will have on the company’s plans to build a nuclear plant on 5,300 acres near New Plymouth, Idaho.

The SEC’s news release, however, is pretty damning:

AEHI’s fundraising was facilitated by a scheme to drive up the company’s stock price, both through frequent press releases (at least 87 in 2010 alone) and efforts of paid stock promoters to manipulate the stock price. The SEC alleges that the company has made multiple misrepresentations, including claims that its executives had such confidence in AEHI that they had not sold a single share of company stock. Records obtained by the SEC show that Gillispie and Ransom have instead secretly unloaded extensive stock holdings and funneled the money back to Gillispie.

The SEC is also calling out the company for underreporting CEO Don Gillespie’s salary by at least a factor of six – pretty big numbers considering the company says he has a salary of $133,000.

The company blames foes of the Payette County power plants for its woes. Says Gillespie:

“The SEC has notified AEHI that the inquiry should not be construed as an indication by the SEC that any violations of law have occurred. We plan to fully cooperate with the SEC and to address the concerns that they have raised,” said Don Gillespie, AEHI CEO.

The SEC has not notified AEHI whether the temporary suspension [of stock trading, set to expire Dec. 28] was prompted by the submission of any specific complaints. However, local anti-nuclear groups and certain vocal opponents of AEHI have taken responsibility for this action in press releases, online forums and financial blogs.

(That's from a press release issued yesterday that doesn't mention the charges filed today. Neither the Idaho Statesman nor Dan Yurman writing at Idaho Samizdat has heard from Gillespie on the charges themselves.)

This contrasts with the SEC’s order, which calls for freezing assets and seeks “investor relief” from the company. That doesn’t sound like a hand-slapping is in the offing to me.

I’m all for nuclear power. I’m all for nuclear power, however, funded and operated by companies that run honest, ethical organizations which AEHI may not be, if the SEC investigation finds otherwise. I don’t like to see any alternative energy project become a financial toy for people who want to enrich themselves while only giving lip service to providing the electricity we need to reduce carbon emissions in the United States.

And as much as the Snake River Alliance has been a thorn in the side of nuclear proponents in Idaho, I can't say I fault them for probing AEHI and filing the complaint. Should the allegations prove true, SRA has done the state a service. Nuclear proponents in the state know better than to hand SRA a juicy bone like this, because you know they'll chew on it.