$100+ million US taxpayer dollars lost, Obama green stimulus recipient Ecotality may file bankruptcy, SEC subpoenas for insider trading in 2010 and 2011. Praised by Obama in 2010 St. of the Union, Ecotality pres. Michele Obama guest at 2010 St. of U

8/12/13, "Ecotality Warns It May Need To File For Bankruptcy," nasdaq.com, via rttnews

"Ecotality, Inc. ( ECTY ) said Monday that it may need to file for bankruptcy, citing adverse developments that may impact its ability to meet ongoing obligations and also fund anticipated operating losses. The company's shares are down more than 74 percent in the regular trading 

session....
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Ecotality also incurred significant expenses and liquidated damages in connection with a previously disclosed investigation of the company by the Department of Labor under the Fair Labor Standards Act and the Davis-Bacon Act. The company has agreed to pay back wages and liquidated damages totaling about $855 thousand to certain employees and contractors in consideration for releasing the company of any liability with respect to wage-related matters....

Further, Ecotality said it was facing some uncertainty in resolving a phenomenon occurring in some of its previously installed EVSEs that causes overheating, and in certain rare cases melting, of the connector plug that connects the EVSE to the electric vehicle when charging."...

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1/27/10, "President Honors ECOtality/eTec in State of the Union Address," "eTec’s Karner a Guest of the First Lady,"  businesswire.com

"President Obama said, “The plan that has made all of this possible, from the tax cuts to the jobs, is the Recovery Act. That's right - the Recovery Act, also known as the stimulus bill. Economists on the left and the right say that this bill has helped save jobs and avert disaster. But you don't have to take their word for it. Talk to the small business in Phoenix that will triple its work force because of the Recovery Act.” 

That Phoenix business, mentioned by President Obama, is ECOtality’s subsidiary eTec. The company is the project manager for The EV Project, and, with its 40+ project partners, will oversee the largest-ever rollout of electric vehicle infrastructure in the United States. Last fall, the US Department of Energy – through the Recovery Act – awarded nearly $100 million to create that infrastructure, support renewable energy and most importantly, to create jobs.

Jonathan R. Read, CEO of ECOtality said, “The President’s acknowledgement of our company is a strong vote of confidence for the transformative work we are doing, and a tribute to all our employees who have participated in making us a cutting-edge force in this emerging electric-vehicle industry."...

eTec President & CEO Don Karner attended the speech tonight in the House of Representatives chamber as a guest of First Lady Michelle Obama. (For a complete list of the First Lady’s guests, please click here.)"...

[Ed. note: Don Karner was subpoenaed at his home by the SEC in Dec. 2011. The company Ecotality was subpoenaed in Oct. 2010.]

(continuing): "Karner said, “It is hard to find the words to describe how honored and privileged I am to be here. The work we are doing with our partners on The EV Project is critically important, because it will inform the way electric vehicle infrastructure is established in the United States and around the world.”

Read said, “Under Don’s guidance, eTec has been the leader of this business for more than two decades, and those of us in the ECOtality organization are incredibly proud tonight.” He added, “The President remarked that he has never been more hopeful about the future of the United States than he is now. We share that hope and that optimism, and are deeply grateful for Administration’s confidence in us and in our partners in The EV Project.”
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Ecotality had never made a profit since going public:

8/12/13, "Since going public in 2005 the company has never recorded a profit."(item at end of article)

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Reported 144 jobs created at $868,055. per job.

3/22/12, "Stimulus recipient under investigation for insider trading,"CBS News, Laura Strickler

"A company awarded $126.2 million in stimulus taxpayer funds from the U. S. Department of Energy is under investigation for insider trading according to a federal subpoena obtained by CBS News.

The company, San Francisco-based Ecotality, makes and installs chargers for electric cars.

The company received a subpoena from the Securities and Exchange Commission in October of 2010.

The president of Ecotality North America Don Karner was sent an additional subpoena in December of 2011, which specifically asks for any and all documentation surrounding the public announcement of the first Department of Energy grant to the company for $99.8 million on August 5, 2009.

The government also wants all communication regarding the federal grant from at least four Ecotality employees and two board members including the company's CEO Jonathan Read. Karner was required to supply documents to the SEC by early January.

A company spokesperson told CBS News in an email, "We are cooperating fully with the SEC and have no further disclosures or updates that we are able to provide outside of our public filings."

Ecotality was awarded $99 million in 2009 and an additional $26 million in October 2011. Since the beginning of the grant period in October 2009 the company reported creating 144 jobs according to Recovery.gov .

As part of the $99 million grant, the company is supposed to install 14,000 electric car chargers in five states. To date the company says they have installed 6,400, less than half.

Electric cars are not rolling off production lines at the expected rate and sales have not been as strong
as hoped.

The Obama administration's goal was for a million electric cars to be on the road by 2015 but Brett Smith, an expert at the Center for Automotive Research in Michigan, says that number is estimated to be closer to half a million.

The Securities and Exchange Commission would not comment on the subpoena. Ecotality's stock was trading today at $1.08 down from $5.24 last May.

Editor's note: the original version of this story said the company received a subpoena in December of 2011. The subpoena in December 2011 was sent to the president of the company at his home. The company itself received an SEC subpoena in October 2010."


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Ed. note: White patches you see on this post are vandalism placed there by google hackers.




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