MINNEAPOLIS (CN) - The SEC on Wednesday charged the former CEO and CFO of a clean-coal technology company with making false statements to sell $43 million in securities, and separately charged a network of brokers with selling Bixby Energy Systems' securities without being registered to do so.
The SEC claims that Bixby's former CEO Robert Walker and former CFO Dennis DeSender made repeated misstatements about the company's core product - a machine that supposedly produced synthetic natural gas through a proprietary clean coal technology.
DeSender was convicted of bank fraud in 1998 but the defendants never disclosed that to investors, the SEC says.
"They told investors that Bixby's coal gasification machine was proven and operating when in fact it had substantial technological defects, did not function properly, and was at risk of self-destruction," the SEC said in a statement announcing the two lawsuits.
Walker, 69, lives in Anoka, Minn., DeSender, 64, in Minneapolis. The SEC also sued DeSender's company DLD Financial, which "has never been a registered broker-dealer," according to the federal complaint.
Walker founded Bixby Energy Systems in 2001. The SEC says Bixby paid DeSender at least $3.6 million for selling its securities, and that DeSender kicked back more than $600,000 to Walker.
In the second complaint, the SEC says the unregistered brokers and DeSender sold more than $21.7 million in securities, including stock, promissory notes and warrants, to at least 560 investors.
Charged in this complaint are Gary A. Collyard of Delano, Minn.; Collyard Group LLC based in Minnetonka, Minn., and owned by Collyard; Paul D. Crawford of Spring Lake Park, Minn.; Crawford Capital Corp. based in Minneapolis, and owned by Crawford; Ronald Musich of Hamel, Minn.; Joshua J. Singer of Lino Lakes, Minn.; Michael B. Spadino of St. Paul; Marketing Concepts Inc. based in Woodbury, Minn., and owned by Spadino; and Christopher C. Weides of Elk River, Minn.
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