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by Mike Caswell

The U.S. Securities and Exchange Commission has filed a civil fraud case against Canadian John Bordynuik for overstating the assets of pink sheets listing JBI Inc. by $9.99-million. (All figures are in U.S. dollars.) The figure comprised almost all of JBI's assets, and was used to help the company raise $8.4-million.

The case is a setback for JBI, which has for years been promoting a product that purportedly converts waste plastic into fuel. The process, which the company calls Plastic2Oil, was touted as a solution to the problem of plastics entering landfills. The stock has been as high as $7.45 in the last three years, but it closed at 86 cents on Wednesday, falling $1.49 in late day trading after the SEC announced the charges.

The SEC says that in 2009 Mr. Bordynuik overstated the value of a media credit the company had acquired for one million shares, listing it on the balance sheet as being worth $9.99-million despite recommendations from his accountant. According to the SEC, the credit should have been valued far more conservatively, initially at $1-million and later at nil. Shortly after raising $8.4-million, the company reported that its financials could no longer be relied upon and wrote the value of the media credit down to nil.

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