U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20655 / July 28, 2008
Securities and Exchange Commission v. Aerokinetic Energy Corporation and Randolph E. Bridwell, Civil Action No. 8:08-CV-1409-T27MSS (M.D. Fla.)
SEC Obtains Order Halting Alleged Offering Fraud by Purported Alternative Energy Company
The Securities and Exchange Commission (Commission) announced today that on July 23, 2008 it filed an emergency action to halt an alleged ongoing fraud involving the sale of stock by Florida-based Aerokinetic Energy Corporation (Aerokinetic), and its president, Randolph E. Bridwell, a resident of Sarasota, Florida. Acting on the Commission's request for emergency relief, on July 24, 2008, Judge James David Whittemore of the United States District Court for the Middle District of Florida issued a temporary restraining order, an asset freeze over Aerokinetic's bank account, and other relief against the defendants.
The Commission's complaint alleges that, from at least September 2006 through the present, the defendants raised at least $535,000 from 24 investors nationwide (and are currently seeking to raise an additional $575,000) by conducting a fraudulent offering of unregistered securities in the form of common stock. Aerokinetic, a Sarasota company, is purportedly in the business of researching, developing, and marketing alternative power technologies and other innovative products. According to the complaint, the defendants claimed to have developed new energy technologies, including a power generation station that is capable of creating electrical energy at a fraction of the cost of conventional or nuclear means, without generating any pollution. They further claim to have built an operating power generation station and to hold patents on these new technologies, as well as to have standing purchase orders for the finished product. In addition, the defendants have told investors and potential investors that they project millions of dollars of sales revenue within Aerokinetic's first years of operations and billions of dollars shortly thereafter.
The Commission's complaint alleges that the defendants' claims are patently false. In contrast to its claims, Aerokinetic has no patents, license agreements, contracts, suppliers, customers, sales, revenue, or market share. In addition, Aerokinetic's purported energy technologies and products are, at best, in the early development stage and, therefore, its predictions of imminent financial success and financial projections lack any reasonable basis in fact. Moreover, contrary to the defendants' assurances that they would use investor funds to research and develop Aerokinetic's products, the complaint alleges that Bridwell has misappropriated investors' funds to pay his personal expenses, with approximately $230,000 in investor funds unaccounted for.
The Commission's complaint alleges that Aerokinetic and Bridwell violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Court's July 24 Order provides that the temporary restraining order and asset freeze would remain in effect until August 4, 2008. The Court further scheduled a hearing on the Commission's motion for a preliminary injunction on August 1, 2008. In addition to the interim relief already granted by the Court, the Commission seeks a final judgment against the defendants enjoining them from future violations of the foregoing antifraud and securities registration laws, ordering them to disgorge all ill-gotten gains, and assessing civil penalties.