In the Matter of Maxwell Technologies, Inc., et al. Admin. Proc. No. 3-18408

On March 27, 2018, the Commission instituted and simultaneously settled cease-and-desist proceeding (the "Order") against Maxwell Technologies, Inc. ("Maxwell"), Van M. Andrews ("Andrews"), David J. Schramm ("Schramm"), and James W. DeWitt, Jr., CPA ("DeWitt") (collectively, the "Respondents"). The Commission found that, from December 2011 through January 2013, Maxwell, a California-based company that develops, manufactures, and markets energy storage and power delivery products, through its former officers Andrews, Schramm, and DeWitt, engaged in an accounting fraud scheme that improperly recognized over $19 million in revenue from future quarters in violation of U.S. Generally Accepted Accounting Principles. The Commission ordered Maxwell, Andrews, and DeWitt to pay civil money penalties of $2.8 million, $50,000, and $20,000, respectively; and ordered Schramm to disgorge $33,878 and pay prejudgment interest of $6,113 and a civil money penalty of $40,000. Pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, the Commission established a Fair Fund so that the civil penalties could be distributed with the disgorgement and prejudgment interest. The Respondents have since paid in $2,924,991 to an interest-bearing account at the U.S. Treasury's Bureau of Fiscal Services, with the remaining $25,000 to be paid by Andrews in two equal increments due September 23, 2018 and March 19, 2019, respectively.  See the Commission's Order: Rel. No. 33-10472

On July 27, 2018, the Commission issued an order appointing Epiq Systems, Inc. as the Fund Administrator of the Fair Fund.  See the Commission's Order: Rel. No. 34-83727. 

On September 27, 2018, the Commission published a notice of proposed plan of distribution and opportunity to comment and simultaneously published the proposed plan of distribution (the “Proposed Plan”). The notice provided the public with 30 days to submit their comments on the Proposed Plan.  See the Commission’s Notice: Release No. 34-84296 and the Proposed Plan.

No negative comments were received during the comment period. On November 5, 2018, the Commission issued an order approving the plan of distribution and published the approved plan of distribution (the “Plan”). See the Commission’s Order: Release No. 34-84531 and the Plan. 

The Plan provides for the distribution of the Fair Fund, less taxes, fees, and expenses, to investors who purchased shares of Maxwell common stock at inflated prices during the period from February 26, 2012 through March 19, 2013, inclusive, and who suffered losses in the value of their investment after disclosures by the Respondents and the resignation of Maxwell’s external auditors.

On June 13, 2019, the Commission issued an order directing the disbursement of $2,896,421.42 from the Fair Fund to the Fund Administrator for distribution to harmed investors as provided for in the Plan. See the Commission’s Order: Release No. 34-86102. 

On September 16, 2021, the Commission issued an order approving the disbursement of $78,635.72 from the Fair Fund for distribution to eligible investors. See the Commission’s Order: Release No. 34-93025. 

The distribution in this matter was closed on February 22, 2024, when the Commission issued an order approving the final accounting, transferring any remaining or future funds to the U.S. Treasury, discharging the Fund Administrator, canceling the Fund Administrator’s bond, and terminating the Fair Fund. See the Commission’s Order: Release No. 34-99587.