September 6, 2013 / 6:17 PM / 4 years ago

Ex-First Solar executive settles SEC charges over disclosures

WASHINGTON (Reuters) - The former head of investor relations at First Solar Inc will pay $50,000 to settle civil charges that he wrongfully gave some analysts and investors a heads-up that the company was unlikely to receive a U.S. Department of Energy loan guarantee, U.S. regulators said on Friday.

Lawrence Polizzotto settled with the U.S. Securities and Exchange Commission without admitting or denying the charges.

An attorney for Polizzotto declined to comment on the settlement.

The SEC said it has decided not to separately charge the company due to its “extraordinary cooperation,” noting it self-reported the violations to the SEC and had a strong compliance program in place.

“Polizzotto offered previously undisclosed information to select analysts and institutional investors and left the rest of First Solar’s investors in the dark,” said Michele Wein Layne, the head of the SEC’s Los Angeles Office.

“All investors, regardless of their size or relationship with the company, are entitled to the same information at the same time.”

According to the SEC, Polizzotto attended an investor conference on September 13, 2011, where the former chief executive officer publicly expressed confidence the company would get three loan guarantees worth $4.5 billion from the Energy Department.

Two days later, however, Polizzotto learned that at least one of the guarantees had fallen through, the SEC said.

The SEC said that Polizzotto violated fair disclosure rules by drafting and discussing “talking points” in one-on-one calls with analysts and investors on September 21, 2011, that hinted there was a good chance the company would be receiving only two of the three loan guarantees.

Those calls came just one day after the U.S. House Committee on Energy and Commerce had sent a letter to the Department of Energy asking about its loan guarantee program and the status of its conditional commitments for various companies, including First Solar.

The SEC said the committee’s probe caused solar sector analysts some concern about the future of the program, and some of them began reaching out to Polizzotto for details about the status of the loan guarantees.

The regulator said that First Solar’s in-house lawyers had previously told company executives that they would be restricted from discussing the loss of the loan guarantee with select investors or analysts until it was announced broadly.

But the SEC said Polizzotto did not heed that advice.

When First Solar publicly announced it had lost one of the loan guarantees in a press release the morning after Polizzotto’s phone calls with analysts, the company’s stock price dropped 6 percent.

Reporting by Sarah N. Lynch; additional reporting by Jonathan Stempel in New York; Editing by Gerald E. McCormick

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