SEC Settles Charges against Company for Misleading Investors

The SEC issued a cease-and-desist order against a parent company as a result of alleged misleading statements about the progress by its subsidiary in developing an advanced technology truck engine that would meet U.S. emission standards. In a separate complaint filed in Federal Court in the Northern District of Illinois, the SEC charged the company's CEO with misleading investors and aiding and abetting violations by the company.

The SEC stated that the company had, among other things, applied for the EPA certification of an engine even though it knew that the engine was not ready for production and sale to consumers. Despite a series of communications with the EPA in which the EPA raised serious concerns about the technology used, the company made allegedly misleading statements to its investors, suggesting that the certification process was proceeding typically and that the forthcoming engine was commercially viable.

The company agreed to pay a $7.5 million penalty and to cease and desist from future securities violations.