OZ Technology has suffered its largest setback in its attempt to sell a substitute for ozone-eating freon.
The Idaho Department of Finance is forcing the Post Falls company to offer to return about $200,000 of investors’ money because the securities were sold by an unlicensed broker and weren’t registered with the state.
On top of that, the materials touting OZ Technology were misleading, said Gavin Gee, state finance director.
OZ Technology President Gary Lindgren agreed to a settlement with the state that permanently prevents the company from selling any more securities.
Lindgren and other company officials weren’t available for comment Friday.
The company’s product, OZ-12, was designed to be put in refrigeration systems in place of banned freon, which contains chlorofluorocarbons.
CFCs destroy ozone in the Earth’s atmosphere, which allows more ultraviolet light to reach the surface. Ultraviolet rays increase the risk of cancer.
The company told investors the product had no restrictions and that national marketing was assured, according to the judgment.
In fact, 13 states - including Idaho and Washington - had banned OZ-12 for use in auto air conditioning systems over concerns about its flammability.
In 1994 the Environmental Protection Agency listed OZ-12 on its list of “non-approved” freon substitutes.
Investors weren’t given financial statements on the company, nor were they told that Lindgren’s family members would be working for the company, the judgment said.
The company has three weeks to give investors the chance to get their money back.
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