U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23152 / December 8, 2014
Securities and Exchange Commission v. Servergy, Inc., Civil Action No. 4:14-mc-00022-O (N.D. Tex., Dec. 4, 2014)
SEC Files Subpoena Enforcement Action Against Texas Company for Failure to Produce Documents
On December 4, 2014, the Securities and Exchange Commission filed a subpoena enforcement action in the U.S. District Court for the Northern District of Texas against Servergy, Inc., a privately held technology company headquartered in McKinney, Texas. According to the filing, the SEC is investigating possible misstatements and omissions related to Servergy's purported business relationships and technology. Pursuant to subpoenas issued on October 17, 2013, May 14, 2014, and September 16, 2014, Servergy was obligated to produce documents to the SEC, but has failed to do so. The SEC seeks a court order requiring Servergy to produce these documents.
In its court papers, the SEC explains that Servergy has raised approximately $26 million from selling shares of common stock to private investors between 2009 and 2013. The SEC further asserts that, to raise these funds, Servergy represented to investors that, among other things, it had received pre-orders from both Amazon.com, Inc. and Freescale Semiconductor, Ltd. for its only product, the Cleantech-1000 server. The SEC is also investigating Servergy's representations to investors that the Cleantech-1000 consumes up to 80% less power, cooling, and space in comparison to other servers currently available.
According to the SEC's court papers, the staff in the SEC's Fort Worth Regional Office issued subpoenas to Servergy seeking, among other things, documents and communications related to statements Servergy and its agents made to investors and prospective investors; the alleged pre-orders; third-party testing of the Cleantech-1000; and charts comparing the Cleantech-1000 to other servers. The SEC contends that Servergy either has not responded, or has not fully responded, to these requests.
Pursuant to its application, the SEC is seeking an order from the court compelling Servergy to produce all materials responsive to the subpoenas. The SEC notes that it is continuing to conduct a fact-finding investigation and has not concluded that anyone has broken the law.