California Bill Aims To Promote Green Energy Investment Scams

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“Today I’d like to tell you a little bit about the color green . . .”

Green energy is popular.  That popularity makes not just likely, but inevitable that promoters will use the cachet of green energy to attract and sometimes defraud investors.  This month the North American Securities Administrators Association (NASAA) issued an alert warning investors:

With energy demands and a desire for energy independence increasing globally, investments in traditional and alternative energy resources are being promoted more often and are becoming attractive to more investors. Some examples include: wind turbines, solar panels, biodiesel, ethanol, coal, oil, gas, hydrogen, wave, geothermal, oil sands, and liquefied natural gas.  Many of these investments are highly risky and are usually not appropriate for all investors.  It is not unusual for unscrupulous promoters to follow the headlines and take advantage of unsuspecting investors by engaging in fraudulent practices.

“It’s not that easy bein’ green”

For those who need real-world proof, the Nevada Secretary of State issued a press release announcing that a Reno man had been sentenced to 10 years in prison for swindling investors in an energy scheme.  Here in California, the Commissioner issued a desist and refrain order against a group of companies that claimed to be ”committed to acquire or build 100 new green energy power plants, focusing on co-generation and solar technologies”.   808 Investments, LLC et al. (Jan. 19, 2010).

“When green is all there is to be”

Thus, it is particularly alarming to see that the California legislature is considering a bill, SB 43 (Wolk), that would add “bill credits” to the list of exempt securities in Corporations Code Section 25100.  In general SB 43 allows consumers to purchase an interest in a “community renewable energy facility” and receive a bill credit for the generation component of the customer’s electrical service.  These investments should not be given a pass from the qualification requirements of the Corporate Securities Law simply because they are “green”.

 

Topics:  Energy Projects, Fraud, Green Energy, NASAA, Scams

Published In: Energy & Utilities Updates, Environmental Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Allen Matkins Leck Gamble Mallory & Natsis LLP | Attorney Advertising

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