By Jerry Kronenberg, bostonherald.com 20 March 2012
Massachusetts regulators are charging Easthampton’s Urban Power USA with breaking state securities laws, alleging the wind-turbine start-up uses “non-sequiturs and baseless puffery” to illegally market stock to investors.
“Urban Power’s representations are built upon supposition and fueled by speculation,” Secretary of the Commonwealth William Galvin’s office wrote today in an administrative complaint against the firm.
Urban Power did not immediately respond to an e-mail sent to its website, which claims the firm makes a patented rooftop wind-power turbine called the “Urban Turbine.”
Urban Power describes the device as a “low cost, lightweight, bird/bat friendly (turbine that) makes no noise and works well in urban environments.”
Galvin’s office claims the company has been using unlicensed broker/dealers to illegally offer investors some 100,000 shares of unregistered stock for about $5 a share.
Regulators also allege Urban Power sent potential investors a business plan full of “non-sequiturs and baseless puffery (that serve) to materially mislead investors into believing that Urban Power is destined for success.”
For example, the plan allegedly said Urban Power expected:
• $1 million of 2011 sales and $4.2 million of sales in 2013 when the company has actually sold just two turbine systems worth $105,000 in total, according to regulators.
• $51,622 of December 2011 net cash flow and a $516,581 year-end cash balance for 2011. In fact, Galvin’s office said, a bank statement showed Urban Power had just $22,189 on deposit as of Dec. 31.
Regulators want an administrative officer to order Urban Power to stop selling improper securities within Massachusetts and offer to buy back any such shares it’s already sold.
Galvin’s office noted that Pennsylvania regulators have already taken similar steps against the firm for investment sales there.
URL to article: https://www.wind-watch.org/news/2012/03/20/bay-state-regulators-blast-wind-co-s-baseless-puffery/