SEC sues three local men claiming securities fraud
By L.M. Sixel, Houston Chronicle Updated 5:36 pm, Monday, February 20, 2017
The Securities and Exchange Commission sued three local businessmen for allegedly violating federal securities laws, claiming they participated in a scheme to inflate the size and importance of a small energy company so it could be "uplisted" to a major stock exchange.
The SEC alleged in the lawsuit that the scheme involved sham transactions, self trading and fraudulent securities filings aimed at boosting the value of Hydrocarb Energy Corp. in order to raise more capital and create a market in which the businessmen could sell shares at a profit. The suit was filed in U.S. District Court in Houston.
The agency accused Kent P. Watts, 69, former chief executive officer and chairman of Hydrocarb, along with his brother, Michael E. Watts, 71, of engaging in fraud as they tried to move Hydrocarb's stock from the decentralized over-the-counter market where investors deal directly with one another to the Nasdaq stock exchange, the world's second largest stock exchange. Michael Watts worked as a consultant of Hydrocarb, according to the lawsuit.
The SEC also alleged that Kirby Caldwell, 34, sold unregistered securities. Caldwell is the nephew of Kent Watt.
None of the three could be immediately reached for comment. They have not filed a response to the lawsuit in federal court.
The SEC alleges that the Watts sought to replicate a more successful effort back in the 2000s when they "uplisted" the stock of another small company they controlled, Hyperdynamics Corp., to the New York Stock Exchange, the world's largest equities market.
In that deal, according to the SEC lawsuit, the brothers made tens of millions of dollars in profits by selling their shares.
But in the more recent effort the Nasdaq listing effort ultimately failed, according to the lawsuit, and Hydrocarb filed for bankruptcy protection in April 2016.
The SEC is seeking unspecified civil penalties.
34-80058 Feb. 17, 2017 Hydrocarb Energy Corp.
Oh, good finds. We can see some huge potentials here, on the other hand,
The insiders acquired 10.2 M shares in Nov:
Nov 16, 2015, HERNDON S CHRIS, Director, Acquisition: 10,211,166 shares.
And its SC-13G filed on Apr 22, shows 4 funds are holding around 10.4 Million shares in total, as of Apr 22, 2016.
So, the insiders and 4 funds are holding 20.6 million shares totally, or 80% of the 26 m O/S. Vast holdings!
Their 20.6 million shares were worth $56.6 million when it were $2.75 and now are only worth $1.3 million at $0.065.
Strongly believe the insiders and the funds will take strong actions to protect themselves and the shareholders.
It won't stay here for long! Will be hugely rebounding Back to $0.5 - $1 ranges, if not $$!
HECCQ, SC-13G filing on Apr 22, shows 4 funds are holding around 10.4 Million shares as of Apr 22, 2016. out of 26 m O/S.
So, plus 1 insider acquisition of 10.2 million shares in Nov. they're holding 20.6 million shares totally and HECCQ is now just $0.06 from as high as $2.75, How Much have they lost ???
The noteholder is actually part of the company and the management. They just changed owner's name and will get it back by emerging with the stock intact. Now, They're accumulating big shares currently, then will push it to go back to previous pps.
JMO. We'll see.
HECCQ, $0.065, starting moving, High: $2.75, O/S: 26 m ( very low). Should be bouncing hugely soon!
Hmm still think this will bounce somewhere?
HECCQ, this penny stock even filed Bankruptcy ? ! What a POS!
Revenue: $1.8 m
Loss: $11.2 m
Deficits: $93 M
So, the creditor acquired this Garbage for Nothing at all !!!
It'll be Shut down soon, so the stock will be deleted!!!
They have (~3 million) in barrel reserves as well if I am not mistaken. They just haven't done anything in a while, especially regarding Namibia, and so no buying made it a piece of cake to take down. Possibly seeing a pincher play take form as well.
HECC is on OTCQB, much better than most other OTCBB/Pinky Stocks. From $2.75 to $0.1, over-over sold.
Will be bouncing hugely soon with just 26 m O/S.
HECC, $0.1, reversing and huge bouncing coming. It was High: $2.75 not long ago. O/S: 26 m (tiny).
HECC, from $2.75 to $0.09, what a run!!!
Shorts crushed it! They had some bad news regarding some sort of financing. I believe it is oversold and chart is showing a pincher play developing. We will see.
8K convertible note in dispute of defaulting
Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
As previously reported in the Current Report on Form 8-K filed by Hydrocarb Energy Corporation (“we”, “us”, and the “Company”) with the Securities and Exchange Commission on December 2, 2015, on November 25, 2015, the Company received a notice of default from Typenex Co-Investment, LLC (“Typenex” and the “Default Notice”), which alleged the occurrence of an event of default under the terms of that certain Securities Purchase Agreement (the “SPA”) and Secured Convertible Promissory Note (the “Note”) sold by the Company to Typenex on October 16, 2015, due to the Company’s November 17, 2015 sale of an 8% Short Term Cash Redeemable Note to Darling Capital, LLC, which Typenex alleged constituted a ‘variable security’ which therefore resulted in a breach of the provisions of the SPA and Note because the Company did not first receive the approval of Typenex for such sale. Additionally, on November 30, 2015, the Company received a demand notice (the “Demand Notice”) from Typenex formally requesting and demanding the payment of the $2,006,429 alleged due under the Note by December 2, 2015.
As set forth in the December 2, 2015 Current Report, the Company vehemently disagreed with Typenex’s claims and allegations and refused to comply with Typenex’s demands.
On December 3, 2015, Typenex provided the Company correspondence pursuant to which Typenex stated that that it agreed with the Company’s contention that the Note required a 15 day cure right (which Typenex failed to provide for or take into account in connection with the Default Notice or Demand Notice), that Typenex was withdrawing the Default Notice and Demand Notice, and that although Typenex still believes an event of default has occurred, it is not currently seeking to enforce its rights. Additionally, Typenex declared that they were forbearing from taking any further actions under the SPA or Note during the following ten days to allow for, among other things, the parties to discuss the various issues raised and that they further reserved all rights and remedies available under the applicable transaction documents and clarified that they did not waive any rights, powers or remedies in connection with the correspondence sent.
The Company reiterates that it does not believe an event of default occurred under the Note or SPA, that it currently has no intention of paying Typenex under the Note or allowing Typenex to foreclose on any pledged shares, and that the Company continues to analyze its options moving forward in regards to the erroneous claims made by Typenex, which may include, but not be limited to filing a lawsuit against Typenex.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On December 1, 2015, Christine P. Spencer, the Chief Accounting Officer (Principal Financial Officer and Principal Accounting Officer) of the Company provided notice to the Board of Directors of the Company of her resignation as an officer and employee of the Company effective December 15, 2015, in order to return to work with one of her former employers.
The Company wishes to thank Ms. Spencer for her service to the Company and wishes her success in her future endeavors.
The Company has begun the search for a new Chief Accounting Officer and until such time as a replacement can be located, Kent P. Watts, the Company’s Chief Executive Officer will serve as interim Principal Financial Officer.
$HECC recent news/filings
## source: finance.yahoo.com
Wed, 02 Dec 2015 13:30:00 GMT ~ Hydrocarb Energy Corporation Retains Law Firm of Christian Smith & Jewell to Aggressively Pursue Allegations of Securities Fraud Committed by Illegal Naked Short Sellers
[PR Newswire] - HOUSTON, Dec. 2, 2015 /PRNewswire/ -- Hydrocarb Energy Corporation (HECC) announced today that it has retained the law firm of Christian Smith & Jewell to help investigate allegations of illegal naked short selling of the company's stock. Christian Smith & Jewell has represented a number of leading publicly traded companies in their bids to combat illegal naked short selling, including Overstock.com and Taser International both of which alleged illegal activity which resulted in settlement. Such activity is similar to what Hydrocarb's management expects will be found also.
read full: http://finance.yahoo.com/news/hydrocarb-energy-corporation-retains-law-133000403.html
Mon, 23 Nov 2015 22:09:35 GMT ~ HYDROCARB ENERGY CORP Files SEC form 8-K, Entry into a Material Definitive Agreement, Creation of a Direct Financial
read full: http://biz.yahoo.com/e/151123/hecc8-k.html
Mon, 16 Nov 2015 13:30:00 GMT ~ Hydrocarb Announces the Retirement of Floorless Notes
[PR Newswire] - HOUSTON, Nov. 16, 2015 /PRNewswire/ -- Hydrocarb Energy Corporation (HECC) announced it has succeeded in redeeming all its convertible notes that have floorless conversion rights. Hydrocarb Energy was able to complete several financings under more favorable terms which allowed the company to redeem all floorless convertible debt before any dilutive conversions into common stock could take place. The new financings that have facilitated the payoff of these floorless notes include approximately $1.74 million raised using the company's most recent private placement. In addition to these funds raised beginning around August 1, 2015, the company has implemented a new series of short term "Cash Redeemable Notes" that are not designed nor intended to be convertible into the company's common stock.
read full: http://finance.yahoo.com/news/hydrocarb-announces-retirement-floorless-notes-133000033.html
Fri, 13 Nov 2015 21:48:13 GMT ~ HYDROCARB ENERGY CORP Files SEC form 8-K, Entry into a Material Definitive Agreement, Creation of a Direct Financial
read full: http://biz.yahoo.com/e/151113/hecc8-k.html
Wed, 28 Oct 2015 12:30:00 GMT ~ Hydrocarb Estimates 2.9 Million of Oil Barrel Equivalent Reserves from its Newest Reserve Report with Proven Oil Reserves Up 97% From 2014
[PR Newswire] - HOUSTON, Oct. 28, 2015 /PRNewswire/ -- Hydrocarb Energy Corporation (HECC) announced that investors can view online its current Reserve Report prepared in accordance with SEC standards by petroleum engineers Ralph E. Davis Associates. The report, dated September 11, 2015, which includes estimates as of July 31, 2015, indicates Hydrocarb currently has 2.017 million barrels of estimated oil in proven reserves (including producing, shut in, non-producing, behind pipe and undeveloped reserves), and an estimated 18.163 billion cubic feet of natural gas (including producing, shut in, non-producing, behind pipe and undeveloped reserves). Hydrocarb estimates that the gas equates to approximately 0.9 million barrels of oil equivalents (BOE) using a gas to oil conversion ratio of 20:1. The company uses this ratio currently to estimate the dollar value of gas in terms of barrels of oil and has assumed a $43 price for a barrel of oil and a $2.16 price per thousand cubic feet (MCF) of gas.
read full: http://finance.yahoo.com/news/hydrocarb-estimates-2-9-million-123000317.html
basic chart ## source: stockcharts.com
basic chart ## source: stockscores.com
big daily chart ## source: stockcharts.com
big weekly chart ## source: stockcharts.com
$HECC company information
## source: otcmarkets.com
OTC Market Place: OTCQB
CIK code: 0001425808
Company name: Hydrocarb Energy Corporation
Company website: http://www.hydrocarb.com
Incorporated In: NV, USA
Business Description: Hydrocarb Energy Corporation is a publicly-traded Domestic and International Energy Exploration and Production Company targeting major under-explored oil and gas projects in emerging, highly prospective regions of the world. With exploration concessions in Africa, production in Galveston Bay, we maintain offices in Houston, Texas and Windhoek, Namibia. For further information: www.hydrocarb.com.
$HECC share structure
## source: otcmarkets.com
Market Value: $53,930,718 a/o Dec 01, 2015
Shares Outstanding: 24,258,742 a/o Nov 10, 2015
Float: 9,790,474 a/o Oct 09, 2015
Authorized Shares: 1,000,000,000 a/o Oct 09, 2015
Par Value: 0.001
$HECC extra dd links
Company name: Hydrocarb Energy Corporation
Company website: http://www.hydrocarb.com
## STOCK DETAILS ##
After Hours Quote (nasdaq.com): http://www.nasdaq.com/symbol/HECC/after-hours
Option Chain (nasdaq.com): http://www.nasdaq.com/symbol/HECC/option-chain
Historical Prices (yahoo.com): http://finance.yahoo.com/q/hp?s=HECC+Historical+Prices
Company Profile (yahoo.com): http://finance.yahoo.com/q/pr?s=HECC+Profile
Industry (yahoo.com): http://finance.yahoo.com/q/in?s=HECC+Industry
## COMPANY NEWS ##
Market Stream (nasdaq.com): http://www.nasdaq.com/symbol/HECC/stream
Latest news (otcmarkets.com): http://www.otcmarkets.com/stock/HECC/news - http://finance.yahoo.com/q/h?s=HECC+Headlines
## STOCK ANALYSIS ##
Analyst Research (nasdaq.com): http://www.nasdaq.com/symbol/HECC/analyst-research
Guru Analysis (nasdaq.com): http://www.nasdaq.com/symbol/HECC/guru-analysis
Stock Report (nasdaq.com): http://www.nasdaq.com/symbol/HECC/stock-report
Competitors (nasdaq.com): http://www.nasdaq.com/symbol/HECC/competitors
Stock Consultant (nasdaq.com): http://www.nasdaq.com/symbol/HECC/stock-consultant
Stock Comparison (nasdaq.com): http://www.nasdaq.com/symbol/HECC/stock-comparison
Investopedia (investopedia.com): http://www.investopedia.com/markets/stocks/HECC/?wa=0
Research Reports (otcmarkets.com): http://www.otcmarkets.com/stock/HECC/research
Basic Tech. Analysis (yahoo.com): http://finance.yahoo.com/q/ta?s=HECC+Basic+Tech.+Analysis
Barchart (barchart.com): http://www.barchart.com/quotes/stocks/HECC
DTCC (dtcc.com): http://search2.dtcc.com/?q=Hydrocarb+Energy+Corporation&x=10&y=8&sp_p=all&sp_f=ISO-8859-1
Spoke company information (spoke.com): http://www.spoke.com/search?utf8=%E2%9C%93&q=Hydrocarb+Energy+Corporation
Corporation WIKI (corporationwiki.com): http://www.corporationwiki.com/search/results?term=Hydrocarb+Energy+Corporation&x=0&y=0
WHOIS (domaintools.com): http://whois.domaintools.com/http://www.hydrocarb.com
Alexa (alexa.com): http://www.alexa.com/siteinfo/http://www.hydrocarb.com#
Corporate website internet archive (archive.org): http://web.archive.org/web/*/http://www.hydrocarb.com
## FUNDAMENTALS ##
Call Transcripts (nasdaq.com): http://www.nasdaq.com/symbol/HECC/call-transcripts
Annual Report (companyspotlight.com): http://www.companyspotlight.com/library/companies/keyword/HECC
Income Statement (nasdaq.com): http://www.nasdaq.com/symbol/HECC/financials?query=income-statement
Revenue/EPS (nasdaq.com): http://www.nasdaq.com/symbol/HECC/revenue-eps
SEC Filings (nasdaq.com): http://www.nasdaq.com/symbol/HECC/sec-filings
Edgar filings (sec.gov): http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001425808&owner=exclude&count=40
Latest filings (otcmarkets.com): http://www.otcmarkets.com/stock/HECC/filings
Latest financials (otcmarkets.com): http://www.otcmarkets.com/stock/HECC/financials
Short Interest (nasdaq.com): http://www.nasdaq.com/symbol/HECC/short-interest
Dividend History (nasdaq.com): http://www.nasdaq.com/symbol/HECC/dividend-history
RegSho (regsho.com): http://www.regsho.com/tools/symbol_stats.php?sym=HECC&search=search
OTC Short Report (otcshortreport.com): http://otcshortreport.com/index.php?index=HECC
Short Sales (otcmarkets.com): http://www.otcmarkets.com/stock/HECC/short-sales
Key Statistics (yahoo.com): http://finance.yahoo.com/q/ks?s=HECC+Key+Statistics
Insider Roster (yahoo.com): http://finance.yahoo.com/q/ir?s=HECC+Insider+Roster
Income Statement (yahoo.com): http://finance.yahoo.com/q/is?s=HECC
Balance Sheet (yahoo.com): http://finance.yahoo.com/q/bs?s=HECC
Cash Flow (yahoo.com): http://finance.yahoo.com/q/cf?s=HECC+Cash+Flow&annual
## HOLDINGS ##
Major holdings (cnbc.com): http://data.cnbc.com/quotes/HECC/tab/8.1
Insider transactions (yahoo.com): http://finance.yahoo.com/q/it?s=HECC+Insider+Transactions
Insider transactions (secform4.com): http://www.secform4.com/insider-trading/HECC.htm
Insider transactions (insidercrow.com): http://www.insidercow.com/history/company.jsp?company=HECC
Ownership Summary (nasdaq.com): http://www.nasdaq.com/symbol/HECC/ownership-summary
Institutional Holdings (nasdaq.com): http://www.nasdaq.com/symbol/HECC/institutional-holdings
Insiders (SEC Form 4) (nasdaq.com): http://www.nasdaq.com/symbol/HECC/insider-trades
Insider Disclosure (otcmarkets.com): http://www.otcmarkets.com/stock/HECC/insider-transactions
## SOCIAL MEDIA AND OTHER VARIOUS SOURCES ##
PST (pennystocktweets.com): http://www.pennystocktweets.com/stocks/profile/HECC
Market Watch (marketwatch.com): http://www.marketwatch.com/investing/stock/HECC
Bloomberg (bloomberg.com): http://www.bloomberg.com/quote/HECC:US
Morningstar (morningstar.com): http://quotes.morningstar.com/stock/s?t=HECC
Bussinessweek (businessweek.com): http://investing.businessweek.com/research/stocks/snapshot/snapshot_article.asp?ticker=HECC
$HECC DD Notes ~ http://www.ddnotesmaker.com/HECC
HECC IS A GREAT $$$$$ OPPORTUNITY.
HECC 1.95 break sends this
HECC has an estimated 2 million barrels of oil in the ground and no DEPT with a 10m float. Last week PPS went from 1.00 to 1.76 without a peep from IHUB