Hughes Capital Is Barred From Issuing New Stock
Federal securities regulators charged Tuesday that Valencia-based Hughes Capital, the owner of a solar-energy company named Conserdyne, made material misstatements last year when it raised more than $650,000 in stock and warrants to finance acquisitions.
The Securities and Exchange Commission suspended the effectiveness of Hughes Capital’s 1986 securities registration statement, meaning that the company is barred for now from issuing any new stock or converting outstanding warrants into stock.
SEC sources said the statement was suspended in part because the company’s underwriting firm, F. D. Roberts, refused to cooperate with its investigation. Six officials of the firm cited the Fifth Amendment when called before the SEC, the sources said.
The SEC alleged that, among other misstatements, Hughes asserted in its prospectus that it had no specific acquisitions in mind. In fact, the SEC said, Hughes was then contemplating the purchase of Conserdyne, a large stake of which was owned by Hughes President and Chief Executive John L. Knoblauch. Knoblauch resigned from the company June 30, a company spokesman said.
Conserdyne operates as a “micro-utility,” providing discount-rate power to customers needing to supplement their supply from major utilities.
Hughes Capital was a Florida corporate shell when it acquired Conserdyne late last year; subsequently Hughes moved its own headquarters to Valencia, Conserdyne’s home.
