The movement to “go green” has grown increasingly popular over recent years. Now, with more Americans than ever concerned about global climate change and local environmental disasters (like the BP Oil Spill), many investors are looking to invest in environmentally friendly technologies and “green” companies. Unfortunately, this push for “green” investments means increased opportunity for scam artists.Warning that investors’ eagerness may make them easy prey for investment schemes, FINRA recently issued an investor alert advising investors to “Save Your Greenbacks – Don’t Fall for Green Energy Scams.” And, on its website, The North American Securities Administrators Association warns investors that green investment schemes rank in the top ten for 2010 investment scams:”Investment opportunities tied to the development of new energy-efficient “green” technologies are increasingly popular with investors and scammers alike. Scammers also exploit headlines to cash in on unsuspecting investors, whether from investments related to the clean-up of the Gulf of Mexico oil spill or the rising national interest in environmental innovations tied to “clean” energy, such as wind energy, wave energy, carbon credits and other alternative energy financing.”In a recent lawsuit involving a green energy scheme, the SEC filed an August 4 complaint against six men from Kensington Resources (Joseph Porche, Larry Crowder, Konrad Kafarski, Carlton Williams, Gary Juncker, and Dale Engelhardt) for allegedly defrauding 200 investors across the country of $11 million.From 2008 to 2009, the men offered investors unregistered shares of American Environmental Energy, Inc. stock (a company purchased in early 2008 by Porche and Crowder). The Kensington sales tactics included “misrepresentations concerning the payment of sales commissions and the use of proceeds,” as alleged by the SEC.The men, while promising that 80% of money raised would be used by AEEI to “acquire and run fuel and energy facilities,” misappropriated investor funds and used “nearly all of the money to fund the lavish lifestyles of Porche and Crowder, to pay 25% in commissions to Kensington’s sale agents, and to pay for Kensington’s overhead,” according to the SEC complaint.Bottom line: While there are legitimate green energy investments, many – like the Kensington Resources fraudulent offerings of American Environmental Energy, Inc. stock – offer deals too good to be true.
Recovering Losses Caused by Investment Misconduct.
