Broadwind Energy, an alternative energy company, yesterday agreed to pay a $1 million penalty to the Securities and Exchange Commission for accounting and disclosure violations.
According to the SEC, Broadwind Energy prevented investors from knowing that reduced business from two significant customers caused substantial declines in the company’s long-term financial prospects. The SEC alleges that senior management at Broadwind Energy anticipated substantial impairment of intangible assets associated with these customer relationships and privately shared this information with the company’s auditors, investment bankers, and lender. Yet, Broadwind Energy did not disclose this information publicly to investors until several months later, when it recorded a $58 million impairment charge in its financial statements.
