After a February 3rd hearing, a federal judge agreed to lift the preliminary freeze on the assets of Alternate Energy Holdings, Inc., a freeze that had been in place since the filing of a Securities and Exchange Commission(SEC )complaint in December of 2010. The lift was accompanied by strict conditions intended to ensure that AEHI remains in compliance with securities regulations while awaiting trial on charges of fraud and deliberate intent to deceive investors.
The court stipulated that the defendants must report all expenditures of more than $2,500 to the SEC in addition to filling a monthly report with the Commission. The conditions attached to the decision suggest that the court’s release of AEHI’s assets was not without concern for the company’s future conduct. The strict reporting requirements will help the SEC to keenly scrutinize the spending practices of AEHI, preventing any misuse of funds in addition to those already alleged by the SEC. Company CEO Don Gillispie and Senior Vice President Jennifer Ransom stand accused of gross misuse of investor funds – on personal expenses including lavish vacations, jewelry and sports cars – and will face those charges at a future date.
The hearing, which was solely to determine whether to continue the asset freeze, was not a reflection on the overall guilt or innocence of the defendants. The ruling was only on one of the fourteen requests for relief presented to the court by the SEC, and was reached after an hour and a half closed door negotiation between the attorneys for both sides and the judge.
The limited nature of the ruling was reflected in the argumentation before the court; several allegations made by the SEC in its 360-plus page supplemental filling went unaddressed by the defense. Those charges, in addition to any others that surface as the SEC continues its investigation, will be addressed in a jury trial or potentially in a settlement.
In the meantime, AEHI has yet to return to business as usual; Gillispie and Ransom are waiting to return to work pending board approval. That same board received the resignation of two of its members this week, just days after the hearing. The motivation for those resignations remains undisclosed.