The SEC has charged the former CEO and CFO of Bixby Energy Systems, a Minnesota-based clean coal technology company for making false and misleading statements to investors, and separately charged a network of brokers who sold the company’s securities without being registered with the SEC to do so.  The company raised at least $43 million from more than 1,800 investors during a nine-year period through a series of purported private placement offerings of stocks, warrants, and promissory notes. The company used this capital raising activity to help fund operations, pay salaries, and pay commissions to brokers that sold Bixby securities. SEC Compliant Against Bixby: The SEC alleges that Bixby’s former CEO Robert Walker and former CFO Dennis DeSender made repeated misstatements both verbally and in writing to investors about the company’s core product – a machine that supposedly produced synthetic natural gas through a proprietary clean coal technology. They told investors that Bixby’s coal gasification machine was proven and operating when in fact it had substantial technological defects, did not function properly, and was at risk of self-destruction. Walker and DeSender never disclosed these problems to investors.  Investors were also told that company officers would not be compensated for their sale of Bixby securities. However, Bixby actually paid DeSender at least $3.6 million in cash and warrants related to his sale of Bixby securities. DeSender kicked back more than $600,000 to Walker in an undisclosed and fraudulent commission-sharing scheme.  In addition,  DeSender was convicted for bank fraud in 1998. This was never disclosed to investors in offering materials, which instead touted DeSender’s “25 years of financial consulting and operations management experience” and “extensive background in management and operations.” Lastly, Walker and DeSender induced investors to purchase Bixby securities by telling them that Bixby was going to conduct an initial public offering of its shares in the near term, even though they knew that Bixby could not do so. SEC Complaint Against Brokers:  The SEC alleges that Desender and through his corporation DLD Financial Ltd. and aided by Walker induced the purchase or sale of securities when they were not registered with the SEC as a broker or dealer or associated with an entity registered with the SEC as a broker or dealer.  The unregistered company  sold more than $21.7 million in Bixby securities to at least 560 investors.  As compensation for their sale of Bixby securities, the unregistered brokers and DeSender were paid a total of at least $4.9 million in transaction-based cash commissions. They also received warrants to purchase more than 900,000 shares of Bixby common stock.     For more info go to, [SEC 12/21/11]