SEC Inquiry Into Fisker Fundraisers

The U.S. Securities and Exchange Commission is investigating the principals of a private equity firm that has raised a significant amount of the private financing for Fisker Automotive, says Crain’s Chicago Business. Though nothing on the public record has tied the investigation with Fisker, the National Legal and Policy Center, a politically right of center think tank, points out that the commission has recommended administrative proceedings “in connection with a private offering in 2009”. Advanced Equities has been raising private investment funds for Fisker since at least 2009. They established Clean Tech LLC in 2010, which is 40% invested in Fisker, and in Feb. 2011, they invested an additional $150 million in the automaker.

Advanced Equities Inc.’s founders Keith Daubenspeck and Dwight Badger were served by the SEC with so-called Wells Notices in January. A Wells Notice indicates that the recipient is under investigation by the SEC, it informs them of the preliminary results of the investigation, and indicates that a full hearing before the commission is likely. It also gives the subjects of the investigation an opportunity to respond to the preliminary report before a formal hearing takes place. In nearly identical disclosures, Badger and Daubenspeck each said, “I am addressing the (SEC) staff’s concerns, and I am prepared to aggressively defend myself should it become necessary”.

It’s not known if there’s a connection to the SEC investigation, but in February, Fisker and Advanced Equities were sued by an investor, Daniel Wray, for fraud and failure to act as a fiduciary should. Wray says that he bought $210,000 worth of preferred Fisker stock between 2009 and 2001, through Advanced Equities. His lawsuit claims that in January of 2012, around the time that Fisker’s fiscal situation started to deteriorate due to loans that the Dept. of Energy froze, the EV maker and Advanced Equities demanded from him an additional $83,000 “due to Fisker’s urgent need for equity capital”. Wray alleges that he was threatened with dilution of his stock value and the loss of other privileges due to early investors if he didn’t pony up the additional investment.