The Securities and Exchange Commission has come up short again in at trial, this time in a case against two executives at a now-defunct California start-up. A federal judge in Los Angeles tossed all seven causes of action against the execs on Dec. 10, capping a bench trial in which two SEC witnesses contradicted themselves and a third was found to be unreliable.
The SEC filed the suit in 2011 against Peter Jensen and Thomas Tekulve Jr., the former chair and CFO, respectively, of Basin Water Inc. The agency alleged that the pair improperly and fraudulently booked revenues related to six sales transactions in 2006–07, right after the company, which produced a novel water filtration technology, went public. The SEC also accused Jensen of insider trading. The 57-page complaint sought $250,000 in fines apiece, disgorgement and a permanent injunction.
