12:28 p.m. ET
Just one day after CNBC’s Jim Cramer called it a ‘terrific’ buy-and-hold fintech play, noted short seller Andrew Left of Citron Research has issued a damning report on FleetCor Technologies Inc. that calls it the ‘largest clean energy fraud’ in U.S. history.
FleetCor FLT, +1.99% which offers payment services to small- and medium-sized businesses, including fuel cards that can grant a user discounts at the pump, has already been the subject of critical articles. In January, a Bloomberg report outlined customer frustration at the many fees the company’s fuel cards include, the long waits when dealing with its customer service department and the generous pay enjoyed by Chief Executive Ron Clarke. Left himself has in the past called such practices “predatory.”
But Thursday’s report focused on the company’s Clean Advantage program, which allows customers to offset their fleet CO2 emissions. In return for a fee, the program automatically calculates a customer’s emissions and invests in projects that offer a carbon offset.
“This is an outright “green fraud” that has brought FleetCor to their Philidor moment and should lead to the immediate resignation of CEO Ronald Clarke,” Left wrote in the report. Philidor is the name of a specialty-pharmacy company that was at the heart of an accounting scandal at the former Valeant, now renamed Bausch Health Cos. Inc. BHC, +0.83%....MORE
Citron believes that less than 1% of the fees paid by customers to reduce their carbon footprint is used for offsetting investments and notes that the scheme has garnered at least $100 million since it was launched in 2015.
The program is not mentioned in any of the company’s investor presentations or filings with the Securities and Exchange Commission. “Furthermore, analysts have never discussed this program and this week both Goldman Sachs and William Blair talked up the impact of the beyond fuel program, which is only on 5k accounts without one mention of the “Clean Advantage” program, which is on 100k accounts,” he wrote....
Well that sounds like what the oldtimers would call "a disclosure violation under the '33 Act"..
