Washington (Platts)--7Feb2011/614 am EST/1114 GMT

A US district court judge lifted a freeze on the assets of nuclear developer Alternative Energy Holdings Inc after a Thursday hearing, the first since the Securities and Exchange Commission filed civil fraud charges against the company in late December.

In lifting the freeze, US District Court for the Southern District of Idaho Judge Edward Lodge said that the Eagle, Idaho-based company must report any expenditure over $2,500 and the company must follow all federal security laws. The company has about $7 million in assets.

The court's ruling comes after Lodge on December 18 granted the SEC a temporary restraining order and froze the assets of AEHI, CEO Don Gillispie and Jennifer Ransom, president of AEHI subsidiary Energy Neutral.

The SEC is charging that AEHI inflated the price of its pink-sheet stock and then sold millions of shares without reporting their sale. The SEC said AEHI has not explained how it spent more than $19 million of the $26 million it collected from investors. AEHI, formed in 2005, is proposing to build a two-unit, 3,000 MW nuclear plant on a greenfield site in Payette County, Idaho.

AEHI had argued that the charges ranged from unsubstantiated to blatantly false.

"As I said before, the SEC was simply wrong about allegations that AEHI officials were defrauding their investors. After our evidence was laid before the judge, he agreed and made the decision to release the funds," AEHI attorney Richard Roth said in a statement Friday.

Shortly after funds were frozen, Gillispie and Ransom took a voluntary leave of absence. AEHI said Friday that the board of directors is expected to vote early next week to allow the two to resume their former positions.

"This decision allows us to follow through on promises that we have been making all along. Investors entrusted us with their money in order to create a company with a goal of building a nuclear power plant as well as other energy projects and that's what we plan to do," Gillispie said in the statement.

In filings submitted to the court ahead of Thursday's hearing, the SEC said "court-ordered discovery has only strengthened [its] claims, confirming that CEO Donald Gillispie and Senior VP Jennifer Ransom have treated AEHI as their own personal piggy bank."

Michael Dicke, associate director of the San Fransisco office of the SEC, which conducted the investigation against AEHI, Thursday said the case against AEHI would continue and that a trial date will be set.

--Pam Radtke Russell, newsdesk@platts.com

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