The U.S. Securities and Exchange Commission charged California-based Enviro Board Corporation and two of its executives with using baseless financial projections and other misleading statements to defraud investors in a venture to manufacture environmentally friendly building materials.
The SEC charges, in a complaint filed in a Los Angeles federal court, that the company and co-chairmen/CEOs Glenn Camp and William Peiffer raised approximately $6 million from investors over a four-year period by using documents predicting company earnings ranging from $18 million to $95 million per year, allegedly lacking any reasonable basis for the estimates. The company also had persistent manufacturing problems, according to the SEC.
Enviro Board claimed its green materials had already been used in residential and commercial construction projects, but the company had allegedly never developed a commercially viable mill to manufacture products. The SEC also alleges the company misrepresented that it secured $161 million in financing from a vendor, which was instead an entity created by Peiffer without the resources to make that loan.
“We allege that Enviro Board appealed to investors’ desires to benefit the environment by creating the false impression that it was on the cusp of lucrative operations. But Camp and Peiffer were merely lining their own pockets while their unviable manufacturing process has failed to commercialize after nearly 20 years of trying,” said Michele Wein Layne, director of the SEC’s Los Angeles regional office, in a statement.
The SEC’s complaint seeks permanent injunctions, disgorgement of ill-gotten gains plus interest and penalties, and officer-and-director bars against Camp and Peiffer.
