SEC Freezes Solar Panel Maker’s Assets Over Alleged Fraud

The Securities and Exchange Commission (SEC) has obtained a temporary restraining order and asset freeze against a California solar panel company and three of its executives who allegedly defrauded more than 100 investors. The complaint said the three used the ill-gotten funds to pay for a yacht, several sports cars, and cosmetic surgery.

The SEC’s complaint was against Nanotech Engineering, Inc. CFO Michael Sweaney, whom the regulator refers to as a “convicted securities fraudster,” his nephew CEO David Sweaney, and COO Jeffery Gange. It said that all have been engaged in an ongoing fraudulent offering of Nanotech Engineering securities.

During the past two years, the SEC said the three solicited more than $9.4 million in investments from more than 100 people “through deceptive acts,” including misrepresenting and omitting material facts in filings with the SEC, and in private placement memoranda.

“The SEC acted quickly to stop what we allege is an egregious fraud,” said Antonia Chion, associate director of the SEC’s Division of Enforcement, in a release. “The emergency relief we obtained on behalf of investors prevents the dissipation of the defendants’ assets.”

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Starting in September 2017, Nanotech began selling shares of its stock through a private placement memorandum, according to the complaint. But the securities were not registered with the SEC. The shares were priced at $2.80 per share, and the company planned to sell 24 million shares for proceeds of $67.2 million.

This allegedly represented 25% of the equity of Nanotech. The stated minimum investment amount was $28,000, although Nanotech sometimes accepted investments of smaller amounts, said the regulator.

According to the complaint, Michael Sweaney pleaded guilty in 1998 to one count of felony securities fraud in Nevada and was ordered to pay restitution to 10 investors. He was also given a 12-to-32-month suspended prison sentence, and two years of probation. The SEC said he tried to hide his identity from Nanotech investors by “masquerading under the pseudonym Michael Hatton.”

The SEC said Nanotech employees were pressured to cold-call potential investors from Alaska to Florida, many of whom purchased Nanotech shares. The complaint alleged that Nanotech employed numerous sales agents who were unlicensed stockbrokers being paid on a commission basis in a “boiler-room” environment.

“These sales agents cold-called potential investors across the country,” said the complaint. “Investors were convinced to invest by dubious claims of a patent-pending invention that would change the world: the allegedly revolutionary ‘Nanopanel’ solar panel.”

In its private placement memorandum, Nanotech boasted that it “has invented what we believe to be the last generation Solar Panel, thin, lightweight, stronger than steel, yet flexible and three to four times more efficient … also, our panels will allow the use of solar in parts of the world that would otherwise not use solar due to a lack of sunny weather.”

The SEC’s complaint, filed in federal court in Washington, D.C., charges Nanotech Engineering and the three executives with violating the antifraud provisions of the federal securities laws. It seeks emergency relief as well as permanent injunctions, return of allegedly ill-gotten gains with prejudgment interest, and civil penalties.

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Tags: Antonia Chion, David Sweaney, Fraud, Jeffery Gange, Michael Sweaney, Nanotech Engineering, SEC, solar

Thanks to a late-month push, the S&P aggregate pension funded status increased slightly in November, from 85.1% to 85.8%, according to a new report from Aon detailing the funding ratios from defined benefit plans originating from S&P 500 companies.

“Positive asset returns in November helped improve pension funded status getting us close to the levels we were at the beginning of the year – this has been the story all year long as strong asset performance across many asset classes has offset lower discount rates,” said Ari Jacobs, senior partner and global retirement solutions leader at Aon.

Things weren’t looking so bright in the early weeks of the month, but pension asset returns rebounded after being in negative territory, ending the month with a 1.2% return.

The amount fails to recoup some losses in the cumulative 2019 calculation. Aon measured $239 billion in liability increases in 2019 year-to-date, offset only partially by $200 billion in asset increases year-to-date , leaving pensions with a $39 billion deficit. The aggregate funded ratio for pension plans in the S&P 500 decreased overall from 86.0% to 85.8%.

Milliman recently reported similar gains for the 100 largest corporate plans, whose funding ratios increased to 86.8% from 86.1% in November. “Market performance in 2019 has been better than expected for corporate pensions, helping counteract the effect of the low discount rate environment on funding,” Zorast Wadia, lead author of the Milliman 100 PFI, said in a statement.

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The gap between expected or promised Lifetime Financial Security (LFS) benefits and what can likely be provided will hit nearly $16 trillion among 21 countries by 2050, according to a report from Group of Thirty, an international think tank of financiers and academics.

The funded level for state and local plans, namely the ratio of assets to liabilities, rose slightly in fiscal 2018, to 72.8% from 72.1% the year before, according to the Center for Retirement Research at Boston College.

Tags: Aon, Funding, Liabilities, Pension Plans, retirement systems, S&P