Maxwell Technologies Inc. Investor Alert – Board Under Investigation

An investigation on behalf of current long term investors in Maxwell Technologies Inc. (NASDAQ:MXWL), including those who purchased their MXWL stocks prior to May 05, 2009 and continue to hold the MXWL shares, over potential breaches of fiduciary duty in connection with possible violations of the U.S. Foreign Corrupt Practices Act was announced.

Maxwell Technologies, Inc., located in San Diego, California,, develops, manufactures and markets energy storage and power delivery products for transportation, industrial, telecommunications and other applications and microelectronic products for space and satellite applications. According to the investigation by a law firm the investigation on behalf of current long term investors in Maxwell Technologies Inc. (NASDAQ:MXWL) stocks focuses on potential violations of the U.S. Foreign Corrupt Practices Act (“FCPA”), which prohibits companies from making improper payments to foreign officials for the purpose of obtaining or keeping business. Maxwell Technologies Inc. recently disclosed that has been conducting an internal investigation, and providing information and documents to the United States Securities and Exchange Commission (“SEC”) and the Department of Justice (“DOJ”), about “commissions” paid to a sales representative in connection with the sale of its products in China.

Maxwell Technologies Inc announced “these payments equaled the difference between the quoted price for certain products and the amount that the independent sales agent was able to sell such products to certain customers in China. These payments had previously been recorded as commissions; however, a portion of those payments may actually have been rebated directly or indirectly to customers”. Maxwell Technologies said it recorded commissions to the agent of $1.8 million, $653,000 and $178,000 for the years ended December 31, 2008, 2007 and 2006, respectively. Maxwell terminated its relationship with this independent sales agent as of May 20, 2009. Although the review of Maxwell Technologies potential FCPA violations is ongoing, Maxwell Technologies Inc reported in the fourth quarter of 2009 and in connection with the internal review of the matters described above, an accrual of $9.3 million for the potential settlement with the SEC and DOJ. But Maxwell Technologies also stated that it estimates the settlement range will be between $10 – 20 million. Maxwell Technologies Inc, with a current market cap of $295.87million, was able to increase its Total Revenue of the past three years. Maxwell reported in 2007 Total Revenue of $56.71million, in 2008 $80.44million, and in 2009 $101.31million. Nevertheless Maxwell posted a Net Los in all three years. Maxwell reported a Net Loss of $15.65million in 2007, $14.81million Net Loss in 2008, and $22.91million Net Loss in 2009. Shares of Maxwell Technologies Inc. (MXWL) traded recently at $11.20 per share, but were down from its 52week High of $21.81 per share.