HAMDEN, Conn. Host America Corp., a foodservice management and energy services provider, said an investigation by the U.S. Securities & Exchange Commission had been terminated and that the federal agency did not recommend enforcement action against the company.
Host America’s stock price, which trades on the Pink Sheets, jumped more than 25.5 percent on July 18 to close at 2.70, a new 52-week high.
The SEC probe, which was unrelated to Host America’s foodservice operations, was first initiated in July 2005 after the company said publicly it was testing energy-saving equipment for discount-store giant Wal-Mart. After the announcement, the company’s stock jumped from $3.12 per share to $14.25 per share in 10 days, which led the SEC to stop trading and investigate the company.
Host America later admitted that while the company had believed there was an “oral understanding” with Wal-Mart, there “is not and never has been” a formal written agreement for Host America to provide services to Wal-Mart. Host America’s CEO was asked to step down and numerous shareholder lawsuits were filed against the company, which were settled last month. The company was delisted from Nasdaq.
In April, Host America said it planned to focus on its energy division and sell its foodservice operations, Lindley Food Service and Host America Corporate Dining, for a combined $3.7 million. Shareholders must approve the pending sales, but a meeting date has yet to be set.