February 18, 2011
SEC Finds Real Climate Change Hoax
In January 2005, Senator James M. Inhofe famously called "the threat of catastrophic global warming the 'greatest hoax ever perpetrated on the American people,'" in a speech on the floor of the U.S. Senate. A lot of people take issue with that statment for a variety of reasons (and I'm one of them).
Today, in a move far less likely to raise a lot of national debate, the SEC announced that it charged seven people in a "smaller scale" climate-change-related hoax. According to the SEC press release, the SEC charged seven people
who perpetrated a fraudulent pump-and-dump scheme in the stock of a sham company that purported to provide products and services to fight global warming.
The SEC alleges that the group included stock promoters, traders, and a lawyer who wrote a fraudulent opinion letter. The scheme resulted in more than $7 million in illicit profits from sales of stock in CO2 Tech Ltd. at artificially inflated prices. Despite touting impressive business relationships and anti-global warming technology innovations, CO2 Tech did not have any significant assets or operations. The company was purportedly based in London, and its stock prices were quoted in the Pink Sheets.
Of course, here, the hoax (allegedly) is that the company didn't actually do what it claimed it would do, not that claims about climate change were the hoax itself.
As I look at these two items together, I can't help but wonder if Senator Inhofe and people who agree with him would support SEC charges against companies who use concerns about climate change (and efforts to address climate change) as part of their company materials, such as Spectra Energy or PG&E.
Fortunately, given that the SEC issued an Interpretive Guidance on Disclosure Related to Business or Legal Developments Regarding Climate Change, it's unlikely the SEC would choose that path, even if the SEC isn't planning to do much else with that guidance, either.