SEC: Texas Company and its President Agree to Settle Oil and Gas Offering Fraud
A Texas company and its president have agreed to pay nearly $300,000 to settle charges by the Securities and Exchange Commission related to an oil-and-gas offering fraud. The SEC also charged two senior salespeople as unregistered brokers in the transactions underlying the fraud.
According to the SEC’s complaint, filed in the U.S. District Court for the Western District of Texas, Austin-based Petroforce Energy LLC and its founder and president, William Veasey, raised nearly $3.9 million from approximately 80 investors in four fraudulent oil and gas offerings.
The SEC alleges that Petroforce and Veasey provided investors with offering documents and other materials that contained false and misleading statements about the investments. The documents allegedly misrepresented the nature and extent of certain operational problems that affected an early offering and understated drilling costs and overstated the profitability of the wells.
The SEC also alleges that the offering materials misstated the timing and nature of tax benefits associated with investing in the offerings.
The SEC also alleges that Ivan Turrentine and Javier Alvarado, two sales agents employed by Petroforce to offer and sell joint-venture and limited partnership interests to investors, acted as brokers in Petroforce’s securities transactions. The SEC alleges that Veasey, Turrentine, and Alvarado solicited prospective investors and earned money as a result of sales made to the investors.
All four defendants agreed to settle the SEC’s charges, without admitting or denying the allegations in the complaint, Turrentine and Alvarado are required to pay disgorgement and prejudgment interest in the amount of $58,204 and $10,800, respectively, and Petroforce and Veasey to pay civil penalties of $150,000 and $90,000, respectively. The settlements are subject to court approval.