SEC Charges Electric Motor Manufacturer for Misrepresenting Supply Agreement
Oct. 11, 2019
File No. 3-19584
October 11, 2019 - The Securities and Exchange Commission today announced settled charges against a Colorado-based manufacturer of electric motors for making false and misleading statements about a supply agreement with a Chinese customer.
The SEC's order finds that UQM Technologies, Inc. made a series of false and misleading public statements in 2015 and 2016 about a potentially lucrative ten-year supply agreement with a new Chinese customer. According to the SEC's order, UQM, which was facing an imminent cash shortfall at the time, falsely stated that the new customer was a subsidiary of a major Chinese bus manufacturer and had committed to purchasing at least 3,000 electric motors as part of an exclusive relationship that could generate more than $400 million in revenue for UQM. In reality, the SEC's order finds that UQM's new customer was a startup company that had no commercial relationship with the bus manufacturer and lacked the financial resources to carry out its operational plan. UQM's stock price increased significantly after it announced the supply agreement, and shortly thereafter, UQM raised $6.4 million through a securities offering. Ultimately, UQM sold only eleven motors to the Chinese customer.
The SEC's order finds that UQM violated the antifraud provisions contained in Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933, as well as the reporting provisions contained in Section 13(a) of the Securities Exchange Act of 1934 and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder. The SEC's order requires UQM to pay a $500,000 civil penalty. UQM consented to entry of the order without admitting or denying the SEC's findings. During the time period at issue in the SEC's order, UQM's common stock was registered with the SEC and traded on the NYSE American Stock Exchange. UQM has since been acquired by a private company and the registration of its common stock has been terminated.
The SEC's investigation was conducted by Eric Day with assistance from Paul Kisslinger, James Carlson, and Stephan Schlegelmilch. The investigation was supervised by Mark Cave and Anita B. Bandy.