Watch List Update: Undisclosed SEC Investigation of First Solar is Now Over


Based on new information received from the SEC,
We are removing First Solar (FSLR) from our Watch List.

In an 08-Dec-2014 response to an appeal we filed with the SEC's Office of the General Counsel, we were informed the law enforcement exemption, previously cited by the SEC to block our access to records on First Solar, no longer applies.  We interpret that to mean the SEC investigation involving First Solar that caused the denial is now completed.  First Solar is now removed from our Watch List.

The SEC investigative file for First Solar has been remanded for further processing.  We may learn more about what took place if the SEC provides documents to us.  But don't get your hopes up.  We may get some records; however, the SEC consistently denies the public access to the one report it routinely prepares that summarizes why an investigation was opened, the work performed and the conclusions reached.

If the SEC simply complied with the FOIA by releasing these reports on its closed investigations, transparency would be improved and investors better protected.

Brief History:  In a letter dated 03-Nov-2014 the SEC previously cited the "law enforcement exemption" of the FOIA as basis to block our access to the detailed records we sought on First Solar.  As recently as 27-Mar-2014, the SEC had even confirmed that this company was somehow involved in a recently active and ongoing investigation.  A confirmed investigation is the highest standard we can achieve regarding undisclosed SEC activity at a public company.

We filed an administrative appeal to challenge the 03-Nov-2014 denial.  In our experience, about two-thirds of these SEC responses are confirmed on appeal. This was not one of them.

The timing of this year's responses from the SEC, especially the confirmation received in March, suggest First Solar had an undisclosed SEC probe unrelated to the matter referenced in a 10-Q filed 01-Nov-2013, as cited below --

SEC Action:  On September 23, 2011, the Company informed the staff of the Securities and Exchange Commission (the “SEC”) that the Company was commencing an internal investigation regarding a possible violation of Regulation FD. The possible violation arose in connection with disclosures on September 21, 2011, relating to the failure of the Topaz Solar Farm project to meet the statutory deadline to receive a federal loan guarantee from the US Department of Energy. This internal investigation was conducted on behalf of the Company’s board of directors by independent outside counsel. Following completion of the internal investigation, the Company appointed a new Vice President of Investor Relations. The SEC, pursuant to an order dated November 17, 2011, commenced an investigation into the matter, and the Company has cooperated with the SEC during the course of its investigation. On September 3, 2013, the SEC informed the Company that the SEC has concluded its investigation and that the SEC will not be taking any action against the Company. [Emphasis added]

Notes New SEC investigative activity could theoretically begin or end after the date covered by this latest information which would not be reflected here.  In addition, companies can be exposed to multiple SEC investigations. Just because one is over does not mean there are not others.

The SEC did not disclose the details on investigations referenced above. The SEC reminds us that its assertion of the law enforcement exemption should not be construed as an indication by the Commission or its staff that any violations of law have occurred with respect to any person, entity, or security. 

To learn more on our process and what our findings mean, click here.