By Jonathan Stempel
NEW YORK (Reuters) -Plug Power agreed to pay a $1.25 million civil fine to settle U.S. Securities and Exchange Commission charges over accounting and control failures that forced the hydrogen fuel cell provider to restate more than two years of financial results.
Wednesday’s settlement resolves charges that Plug Power accounted improperly for equipment it sold and leased back, misclassified costs related to fuel delivery as research and development expenses, and underestimated potential losses on extended maintenance contracts.
The SEC said Plug Power raised more than $5 billion from investors despite the shortcomings.
It also said the Latham, New York-based company still has a material weakness in its internal controls over financial reporting and ineffective disclosure controls, and could be fined another $5 million if these aren’t fixed within one year.
Plug Power did not admit or deny wrongdoing in agreeing to settle. It uncovered the material weakness in its controls while restating financials for 2018, 2019 and part of 2020.
In a related development, U.S. District Judge Edgardo Ramos in Manhattan on Tuesday night dismissed a lawsuit accusing Plug Power of defrauding shareholders, including over a transaction with Amazon.com, one of its largest customers.
Plug Power provides fuel cells for electrically powered forklifts used by companies such as Amazon and Walmart.
Its share price fell as much as 20% on March 17, 2021, the day after announcing it planned a restatement.
Plug Power did not immediately respond to requests for comment. Lawyers for the shareholders did not immediately respond to similar requests.
(Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis)