SEC Investigating America’s Most Corrupt Airline
March 18, 2016 by lucky
In 2014 I first wrote about Baltia Air Lines, which is America’s oldest start up airline. They’ve been in “business” for 27 years, except they’ve never actually flown a commercial flight, despite owning a 747-200 for over 20 years.
Their business plan is to initially fly between New York and St. Petersburg, Russia, with plans to later expand to other European capitals.
For years Baltia has been pretending that they’re actually going to start flying some day soon. Hell, their website says the following:
Baltia is currently in an advanced stage of the FAA Air Carrier Certification process and expects to begin revenue generating flights in 2015.
If you go to Baltia’s Facebook page, you’ll see they post a minor update every couple of days about how they’re “one step closer” to flying. It’s quite entertaining to see how many people still believe the airline will actually begin operating commercial flights some day.
The airline is publicly traded under ticker code BLTA, and amazingly enough in 2014 had a market cap of nearly $70 million. It’s beyond astonishing that people would invest in them, but I’m sure management was loving it, as they were able to raise that much capital without actually doing anything. I guess that has finally caught up with them, because their market cap is now “only” $11 million (which is still astonishing for a company which has generated zero revenue over three decades). [Market cap is now about $48 million:
BLTA Stock Price - Baltia Air Lines Inc. Stock Quote (U.S.: OTC) - MarketWatch - Airbubba]
For the most part the airline has flown under the radar with regulators, at least up until now. The SEC has filed charges against one of the airline’s executives, Barry Clare. Per the SEC filing:
The SEC’s Enforcement Division alleges that Barry B. Clare, who resides in Bayside, New York and is the vice president of finance at Baltia Air Lines, Inc., acted as an unregistered broker for sales of Baltia’s common stock to investors. Although Baltia has existed since 1989—ostensibly for the purpose of flying commercial flights from New York City to St. Petersburg, Russia—it has never operated a commercial flight or otherwise generated any revenue. To fund its operations, Baltia has sold its stock to investors. Between March 2011 and March 2015, when Baltia raised more than $26 million through such stock sales, Clare allegedly solicited potential investors, recommended the investments in Baltia, negotiated and closed stock sales, and received commissions totaling approximately $1.7 million for his work.
Hilariously, Baltia has also just announced that they’re finally abandoning their 37 year old Boeing 747-200, following repeated certification failures from the FAA. Instead the airline is looking to lease a newer, more fuel efficient aircraft.
Bottom line
Baltia now has no plane and one of their executives is being investigated by the SEC. Could this finally be the last straw for the airline?
It’s amazing how much money Baltia has raised over the past few decades. Anyone dumb enough to pump more money into this company almost deserves the ROI they’ll get from it…