Friday, September 28, 2007

Green Investments

In July, I wrote this post, asking about investment opportunities in climate change industries. I have since done a little bit more of the due diligence that I expected to do. I was primarily motivated by this article that I saw on the Drudge Report. It talked about the "new millionaires" by way of environmentally friendly companies. I chose to investigate the three companies mentioned in the article to see what investment options they had for me, a U.S. investor.

Here's what I found:

  • EcoSecurities: based in Britian, sold only on one of the British stock exchanges, not registered for sale in the U.S.
  • Novera Energy: based in Australia or Britian, sold only on one of the British stock exchanges, not registered for sale in the U.S., Australia, Japan or South Africa.
  • Solar Integrated Technologies: Incorporated in Delaware, based in Los Angeles. Looks good, eh? Nope. Stocks are listed on one of the British stock exchanges, not registered for sale in the U.S.
What does this mean, "not registered for sale in the U.S."? It means that a U.S. citizen or someone in the U.S. can buy, sell, broker or trade these shares. Now I was getting confused. Why would a U.S. company, Solar Integrated Technologies, not make its shares available to U.S. citizens? I e-mailed the company:

Original request for info:

From: Rick ***
Sent: Saturday, September 08, 2007 9:00 AM
To: Dona ***
Subject: US investor question


I was curious why your company, which I learned about from the internet,
does not permit investment to U.S. citizens, even though you are
incorporated in Delaware and based in Los Angeles. Can you please
provide more information so I can understand?

Thank you,
Rick ***

Round 2: Dona's response
----- Original Message -----
From: "Dona ***"
To: Rick ***
Sent: Monday, September 17, 2007 11:35 AM
Subject: FW: US investor question

Thank you for your interest in Solar Integrated. SIT shares are not
registered for sale in the US.

If I can be of further assistance please let me know.

Thank you,
Dona ***

My next question:
----- Original Message -----
From: "Rick ***"
To: "Dona ***"
Sent: Monday, September 17, 2007 9:30 PM
Subject: Re: US investor question

> Hi Dona,
> Thank you for responding. I was already aware that SIT shares were not
> registered for sale in the US. I would like to know why they were not
> registered, especially since the company is a legal entity of the United
> States.
> Thank you,
> Rick ***

Dona's next response: {crickets chirping}

Yep, no next response. First response only took them nine days to give a non-response. When I asked for more specifics, I received no response.

Why is it that they can't be forthright? Do I need to take this up a level - to the SEC - to find out what this company doesn't want U.S. investors to know? I mean, the company deals in industrial solar panels, not some freakish, space-cadet type of product. Why not let the U.S. investor - you know, the one whose government(s) allow them operate as a business in the first place - invest in your company and your product?

I am deciding what to do next. Any ideas besides going to the SEC? Has anyone else seen or experienced the same thing?


Scott said...

What jurisdiction would the Securities and Exchange commission have over a company with no securities on any American exchange?

I would just look at other companies that ARE listed in the US. SIT makes my spidey sense tingle.

Rick said...

Follow-up note:

I spoke with the company's CFO two weeks ago. Turns out that the cost of going public on the selected British exchange was much lower than the cost for going public in the U.S. Plans to go public in the U.S. have been shelved for the time being due to financial constraints internally (changing market) and externally (Sarbanes-Oxley compliance and others).

John said...

Can an American purchase shares just through a foreign exchange without violating SEC regs?

Rick said...


They cannot. I confirmed that with the CFO. It has to do not only with the exchange, but the country of residence as well.