Solv-Ex

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Solv-Ex was a company seeking to commercialize oil sands in 1996. Solv-Ex claimed to be able to extract a tarlike residue known as bitumen from oil sands, and process it into synthetic crude oil. Solv-Ex claimed that it could produce oil at more than competitive costs using this method and with significantly less adverse environmental consequences than competing processes were producing. Additionally, Solv-Ex was to be able to recover raw aluminum and other minerals in the process that are worth three times as much as the oil.

Solv-Ex critics said that other companies like Suncor and Syncrude Canada had similar technologies and that there were other extraction methods now available even more efficient and economical. Moreover, they claimed that Solv-Ex had made material misstatements about its business prospects and financial arrangements at every turn.

Solv-Ex alleged that its competitors were determined that Solv-Ex should not succeed in its objectives to commercialize its process technology because of the huge costs involved in replacing inferior and obsolete process technology with the more efficient and environmentally acceptable alternative offered by Solv-Ex and cleaning up the lakes of toxic residue which they had produced.

Solv-Ex alleged that one of the tactics employed by its competitors was to encourage specialist Wall Street stockbroking firms to short sell Solv-Ex stock and encourage their clients also to do so. The objective of driving down the price of Solv-Ex stock resulted in the publication of a torrent of adverse "analytical" comment. When Solv-ex attempted to defend itself against the short sellers' reports, the Solv-Ex statements were reported in isolation to the SEC, which determined that in isolation these statements could be interpreted as misleading, and imposed a minimal fine of $5,000.

Ultimately, the short sellers prevailed and Solv-Ex was unable to finance the completion of its commercialization program, and finally went into bankruptcy.