A local fuel cell company has settled fraud charges with the federal government that will result in the corporation having to pay out millions of dollars.
The Securities and Exchange Commission announced this week that it has settled fraud charges against Hyzon Motors, which is based in Honeoye Falls, after the government said the company misled investors about its business relationships and vehicle sales.
The SEC also charged two former company executives for their role in a fraudulent scheme.
As part of the settlement, and without admitting or denying the allegations, Hyzon will have to pay $25 million in a civil penalty; also named in the SEC complaint, former CEO Craig Knight and former managing director of Hyzon’s European subsidiary, Max Holthausen.
Knight was fined $100,000 and Holthausen $200,000. Knight also agreed to a prohibition from serving as an officer or director of a publicly traded company for five years, and Holthausen agreed to the same prohibition for 10 years.
Among the accusations from the SEC, that Hyzon created a false appearance that significant sales deals were imminent.
For example, the SEC complaint alleges that Hyzon falsely stated that it delivered its first Fuel Cell Electric Vehicles in July 2021, “even going as far as posting a misleading video of the vehicle purportedly running on hydrogen, when the vehicle was not equipped to operate on hydrogen power.”
In a press release from the SEC, Jason Burt, Regional Director of the SEC’s Denver Regional Office, said that transparency “is fundamental to the federal securities laws,” and he said that the defendants “allegedly violated this principle by misleading investors about virtually every aspect of Hyzon’s business.”
A statement from Hyzon’s current CEO, Parker Meeks, said the company ”is pleased to put this chapter behind us,” and that that “with a strengthened Board of Directors and leadership team, a streamlined product offering, and a rationalized geographic footprint, we look forward to accelerating the hydrogen industry.”
