SEC files complaint against C’dale man
ASPEN The U.S. Securities and Exchange Commission has filed a complaint against a Carbondale man alleging that he misled investors about the financial performance of a now-defunct telecommunications firm.John C. Charters, 45, who served as the CEO of Englewood-based Expanets from April 2002 to July 2003, has agreed to pay $50,000 in civil penalties stemming from accusations that he inflated the company’s income during the same time that its parent firm, Sioux Falls, S.D.-based NorthWestern Corp., completed its securities offerings for more than $800 million, according to court documents.Charters did not, however, admit or deny the allegations of the complaint, records show. He did not a return a phone message seeking comment for this story.The complaint, filed Monday in U.S. District Court in Denver, comes after NorthWestern went bankrupt in 2003, following Expanets’ restating of its true financial status. NorthWestern, which operates regulated utilities in South Dakota, Nebraska, and Montana, emerged from bankruptcy in November 2004.The SEC claims that because Charters, as well as Expanets’ former CFO, Richard Fresia, didn’t accurately portray Expanets’ finances, NorthWestern overreported its income by 90 percent in the second quarter of 2002 and 109 percent in the third quarter of 2002.”Charters knew or was reckless in not knowing that serious problems with Expanets’ collections of its accounts receivable continued throughout the third quarter of 2002,” the complaint says. The complaint goes on to say that “the conduct of Charters and NorthWestern senior executives helped facilitate NorthWestern’s completion of more than $800 million in securities offerings in September and October 2002, including raising $87.5 million in an equity offering that provided the company with operating capital to improve its liquidity position. Approximately a year after these offerings, and after restating its 2002 quarterly financial results, writing off significant investments in Expanets, and disclosing the true results of its 2002 operations, NorthWestern declared bankruptcy.”According to Forbes, Charters currently is the chief operating officer of Redwood Shores, Calif.-based iPass Inc., a technology and Internet software firm. Rick Carroll can be reached at firstname.lastname@example.org.
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