Bob Walker, the former leader of Bixby Energy Systems was arrested and indicted on securities fraud charges after his company admitted to defrauding their investors. Walker was charged with one count of conspirasy to commit securities fraud. He faces up to five years in prison.
Walter is also known as the founder of Select Comfort and is the inventor of Sleep Number beds. He was the president, chairman, and CEO of Bixby from 2001 to 2011. While filling these positions, Walker raised over $43 million from investors by selling company securities based on false and misleading information, according to the indictment.
Walker allegedly falsely told investors that the offers and directors of Bixby would not receive compenstation from sales of securities when, in reality, over $3 million were sent to a company officer. Approximately $600,000 of this ended up in Walker’s pockets. According to the indictment, Walker was also concealing that the money from investors was being used to pay the companies existing investors and to pay for his lavish lifestyle.
According to the indictment, the investors and the company’s board of directors was unaware of the fraud.
The indictment alleges that Walker repeatedly misspoke regarding the capability of Bixby’s coal gasification and liquefaction technology and machine. Walker described the technologies as “proven” and “ready for market” despite the fact that the technology had never worked and the machine was defective.
The Securities and Exchange Commission (SEC) filed a civil suit against Walker, claiming that he and his former Bixby fundraiser, Dennis Desender, were selling unregistered securities.
Desender pleaded guilty to one count of securities fraud and now now awaiting sentencing. He faces up to 20 years in prison.
After admitting to defrauding investors and agreeing to cooperate with a government investigation into Bixby’s former officers and employees, Walker’s one count of securities fraud will not be prosecuted.