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WOW, for almost a half minuite I thought the SEC may have finally caught up with JD:
SEC Charges Oil and Gas Well Operators for Defrauding Investors
FOR IMMEDIATE RELEASE
2008-185
Washington, D.C., Aug. 28, 2008 — The Securities and Exchange Commission today charged a Colorado Springs resident with fraud for touting potentially astronomical returns to investors in his oil and gas companies while spending $2.3 million of investor funds to pay for a lavish lifestyle, including the purchase of a custom speedboat, ski vacations, fitness equipment, and jewelry.
· Litigation Release No. 20694
According to the SEC's complaint, Donald H. Allen and his two companies, H&M Petroleum Corporation (H&M) and American Energy Resources Corporation (AER), raised approximately $9.9 million from more than 350 investors nationwide by marketing oil and gas investments through cold call telephone solicitations and "seminars" advertised in local newspapers. Among other things, Allen and his companies never disclosed that they failed to earn profits for any investors in prior offerings.
"Allen convinced investors to finance his projects without telling them about his actual uses of their funds or his dismal track record in failing to generate investor returns," said George B. Curtis, Deputy Director of the SEC's Division of Enforcement. "This enforcement action reflects the Commission's unwavering commitment to pursue and punish unscrupulous promoters who choose not to make full disclosure to their investors."
Donald M. Hoerl, Acting Director of the SEC's Denver Regional Office, added, "This enforcement action should deter Allen and others from offering investments without disclosing fundamental information to unsuspecting investors. Investors are encouraged to carefully review and ask questions about offering materials they receive to assure that they understand and appreciate such disclosures when made."
According to the SEC's complaint, Allen, AER and H&M defrauded investors between March 2002 and December 2006 by making at least four types of material misrepresentations or omissions in their solicitations:
Their offering materials stated that investor money would be used only for drilling, testing, and completing specific, identified well sites. However, Allen and his companies used investor funds for other purposes. Most notably, Allen used more than $2.3 million to pay for personal expenses, including the purchase of a custom speedboat, ski vacations, fitness equipment, and jewelry.
In their offering materials, Allen and his companies claimed that they had an "impressive record" of "several … highly successful programs." However, Allen and his companies had never before generated profits for any investors, a fact which was not disclosed.
Allen and his companies included projections in their offering materials that touted annual returns of up to 354 percent. However, they failed to disclose the highly speculative nature of these projections, as well as their failure to generate any profits for prior investors.
The offering materials told investors that, because the issuers — AER and H&M — invested in their own projects, investors could be assured that they had meticulously analyzed the project's prospects. However, AER and H&M had not purchased interests in any of their projects.
The SEC's complaint also alleged that Allen and his companies improperly sold securities to investors in unregistered transactions, and that Allen acted as an unregistered broker.
Allen and his companies agreed to settle the charges against them without admitting or denying the SEC's allegations. Each of them consented to the entry of injunctions prohibiting them from future violations of all of the securities laws that the SEC claims they violated. Allen and his companies also agreed to pay $510,000 in disgorgement — an amount that represents an estimate of the assets they held as a result of the fraudulent offerings — and to pay the costs of distributing these funds to injured investors.
For more information, contact:
Donald M. Hoerl
Acting Regional Director, SEC's Denver Regional Office
(303) 844-1060
Observation to the board. This whole thing stinks to high heaven. If the SEC was already investigating Grifco as Trinityz1 has said over and over, then why has not the SEC, with this bamboozle on top of everything else, at the very least put a halt on the trading of Grifco stock? It should have been the SEC that stopped this DTC recalculation of the spinoff ratio thing rather than a lawsuit by CTBG!!! I have my sincere doubts that the SEC cares one whit about pinkies or the millions of dollars lost to the scam artists, naked shorters, rouge market makers, hedge funds, or any other crook that just keep thumbing their noses at them via "Safe Harbor Statements", PR's with slick innuendoes of great things ahead, slick attorneys, etc., etc., etc. They may say it is not so, but it sure smells like fish-stink to me. I think the SEC is proving itself to be like the Wizard of OZ; just some little guy with a government nametag pushing buttons behind a thick curtain of secrecy allowing the investing public to believe he has a big legal club to beat the bad guys with. Ha, even when they get a blatant thief like Jim Plant (the CKYS scam) it took them a year to bring him to court and then he is given almost another year before the judge will sentence him after he has plead guilty. Meanwhile, the investors just sit and seethe with anger hoping to get some little residue from the Fair Funds Act, that is if there is any money he did't get hidden in some swiss bank account.
IMPO The SEC and the enforcement and judicial systems behind it are worse than a pack of toothless lions, they are just a bunch of sick kittens!!! Where is any justice in this colossal mess? If justice is somewhere down the road, how much more damage will investors suffer in the meantime??? How many more accounts will be wiped out? OR IS THIS JUST THE WAY IT IS??? YIKES!!! Show me I am wrong, SEC!
By the way, for those that may post on the "other board" I am a different "Andy" and I still have my wallet. It is just a little lighter now! Just thought I would clear that up for my other "Andy" friend if he is still around. GLTA
Just checked in with Nevada and the authorized shares are still at 1.4 billion. No more dilution at the moment but that is not to say some dilution is coming.
Trinitz1, I sent off a personal letter via e-mail directly to SEC Chairman Cox. His e-mail address is chairmanoffice@sec.gov. Also sent a copy of CTBG's PR regarding suit requesting the SEC intervene on the side of CTBG. Ha, think I will even get a note back??? Anyway, I thought it would be a step up over the normal complaint channel. I am also going to send copies of it to my senators and congressmen. I think the more noise we make on this issue the better.
Trinityz1, going back to the time of the spinoff, if there were GFCI shares shorted beyond the correct amount to allow the ratio of 1/89/1, should they not have been forced to cover. I thought it was the DTC responsibility to keep the numbers straight. Shoud not the DTC have forced the short sellers (if any) to pony up??? I may be entirely wrong in this assumption, but, maybe not. If they were in fact issued, then JD should have been forced to buy them back. The DTC is obviously complicit in this whole mess and CTBG shareholders should not have to bear the brunt of this mess. Somebody has been bought off by JD!!!
TrinityZ1, I just called the CTBG attorneys, Mason et.al., and got their e-mail address. I e-mailed my proof that Scottrade has adjusted my spinoff to the new ratio and then deducted shares from a CTBG purchase I made on Aug 1st to make up for the shares I sold. Scottrade is asking for trouble as near as I can see. If you can't FAX the attorneys, you can e-mail them at jmason@masoncoplenlaw.com. Hope this helps the attorneys build their case against GFCI, DTC, and JD. Where is the SEC in all this? I got the standard answer from the SEC in response to my complaint to them on this fiasco. It is next thing to the twilight zone if JD and his cronies get away with this SCAM. I really would like for Jerry Swinford to keep his SHs posted on all that is transpiring. Tread carefully in the Pinkies, people, or don't go there at all.
Cyofish, I doubt that your suggestion is even feasible. Everything is priced based on current value of shares as opposed to historical price. Further, JD waited over a year before making the distribution. Should the distribution have been at the cash value as of May 1, 2006? Wouldn't that be nice? This is a matter for the regulators to straighten out. As soon as I send this I am going on line to place a complaint with the SEC. I pray that there will be dozens of complaints along with mine.
Please excuse the double posting. I am a little new at this game.
Cleverrox, I do not believe diluting CTBG shares to make up the difference in shares to cover the shortfall. Nothing would be gained by doing so except further damaging CTBG's chances of survival and present shareholders. By doing a little math, it appears that GFCI had some 57.765 million shares O/S rather than 39.683 million on May 1st, 2006, thereby spreading out the 75 million CTBG shares to 1.29387 per share ratio of GFCI rather than 1.89. IMPO The overall fairest way to rectify the matter, short of forcing GFCI aka Jim Dial to come up with the additional shares of CTBG by buying them on the open market and furnishing them to the transfer agent for distribution to the short-changed shareholders, is to reduce the spinoff ratio as they are now seeking to do. Is it legal??? Who in the heck knows. I know that I am going to file a complaint with the SEC over this matter. I also am setting up to buy back the difference in the shares I sold at .06/Sh 1st thing 08/01. What the impact will be on GFCI shares over this mess, if any, is anybody's guess. GLTA to present holders of GFCI/CTBG.
Spark/TrinityZ1: I am waiting to speak with Scottrade in the morning. From what I am told, I have no chice but to make up the difference. I personally believe the Transfer Agent should be held just as much responsible as JD and Grifco. Are not they the ones who are supposed to keep the numbers right. I am darn sure there will be a significant stink over this. I would think that the SEC should be on this like a chicken on a bug, or maybe they are just chicken.? However, I do like the idea of the SP going up. Two things may push up the SP: 1) the fact that those who sold their shares now have to either pay or buy back the difference; and 2) As you said, there will be no further worry about what will be done for those who did not get their fair share of the spinoff (i.e. no expansion [dilution]of shares). I would much rather have seen JD forced into buying the difference in shares in the open market but do not see that happening at this point in time. Where oh where is the SEC?
Just talked with Scottrade because they are asking me to pay back some money on CTBG shares I got in the spinoff and later sold. The reason why, According to Scottrade, is due to Grifco not providing enough shares to the Transfer Agent to cover the spinoff of 1.89 shares of CTBG for each share of GFCI held on May 1st 2006. The transfer agent gave GFCI until COB today to make up their shortfall, which, according to Scottrade, they did not do. Although there appears to be some confusion, my Scottrade agent tells me the Transfer Agent has or will reduce the spin-off of shares from 1.89 to 1.29387 shares per share of Grifco (GFCI). That most probably means that many are going to have the shares they received reduced by .59613 shares per share of GFCI then held. It also means that some shareholders of GFCI who did not get their fair share of the spinoff will probably be receiving the difference in their accounts up to the 1.29387 to 1 ratio. Those who received shares based on the 1.89 to 1 ratio and sold them, as I did, will have to pay some $$$ back or buy shares sufficient to make up the shortfall of shares sold. Methinks there is going to be some turmoil tomorrow with CTBG shares. Any guesses as to what the SEC is going to do about this little deal. ??? Will CTBG go up, down, spin-around, or die??? Hey Jimmy, drop dead. Hey Jerry Help!!! Hey SEC how about giving we shareholders some protection!!! Hey! Hey!! Hey!!! Somebody, anybody, how about a PR to tell us the straight of what is going on. SEC? GRIFCO? Coil Tubing? Andybody???
TrinityZ1: Hear that. This whole business has made me crosseyed. Still hoping that the SEC will get to the core of this scam and perhaps help holders of this worthless stock via fair funds. Even if they do that will be months or even years away. Justice delayed is no justice at all to those who fall out along the way. It would be nice when it is over if the SEC would post step by step how GFCI, Dial, and cohorts were able to execute the scam. But, of course, that would only show their inability to police the market as they supposedly are doing. Ha! Really hurts when the watchdog is a fox in the chicken coop. Wouldn't it be nice if the few they do accidentally catch would be put away for life instead of lightly tapped on the wrist and truned loose to do it all over again. Perhaps chopping off theiving hands may not be so bad an idea after all.
TrinityZ1, Any idea as to how many ducks they are lining up? Any LLC's involved that we know of? Surely it goes way beyond the Useltons, does it not? Sure would like more info if any is legitimaely available. Thanks for your post.
Okay, where are the deep pocket investors holding millions of shares who would benefit by a big boost in GFCI value. Why won't these bozo's force something? Just the value that we were supposed to get from the global oil sale would be worth big big bucks to the "big" investors. Are they nuts or were all their posts just full of baloney? Or perhaps they believe there is a criminal element involved with GFCI that is just too powerful to stand up against. I would be interested in other views, that is if anyone is still posting.
The real question to be answered is: Will the SEC not really find anything wrong with GFCI? If not, why not??? Wow!
Does anyone on the board think that the SEC is really investigating GFCI and its subsidaries or will actually prosecute JD? If so, please give a reason for thinking so. Thanks
Trinityz1, You have indicated previously that JD & company were under SEC investigation for their shenagians. If so, how can you say he is winning and we are losing. Will not SEC force some sort of correction or otherwise prosecute this scum bag and his cronies or are we now finally and hoplessly screwed? Will not fair funds act provide some recovery more than the present .004 cents SP? Is there none who can tell us the status of the RR settlement or potential monies from GOTL, etc. etc.? Are there not some big dollar investors who can afford digging out some this information. My two-bits and limited resources are not worth the dig but, pehaps, some others have enough vested interest to chase this dog down. Where are you million plus shares guys??? I am sick and tired of this doom and gloom. Can't anyone post something positive??? All the BBB posts of FTXN value is worthless unless we can dig out something concrete about actually getting some bucks out of GFCI.
Anyone got any knowledge as to what is going on at CTBG. What happens with the form 15 filing and the stock is de-registered? What if this is a bad cop good cop scam with GFCI/CTBG and we have all been bamboozeled? Anyone got a guess. This board has been dead in the water for a long time. What is going on??? Jerry, ppppuuullleeezzzee tell us.
Trinityz1, Thanks for your responses 10251/52. Definitely do not want to meddle with any ongoing SEC investigation should one be in progress. A JD PR would be nice, especially one announcing the RR settlement. This thing could hang fire forever. Will continue to hang tight. Just hope the noose tightens around JD's neck instead of our wallets.
All that I have read in the past regarding Grifco and JD does raise much suspicion that JD is a crook and needs to be taken down. However, is there not still a slim chance that he is little more than an inept CEO trying to find his way in this whole sordid mess? Is that not what BBB was alluding to in his post regarding why JD is not keeping company with all the other crooks in their ongoing scams? Perhaps there is still some hope to cling to. I am still Long and hoping since there is little else I can do.
AndyHH
Trinityz1, Just what do you base such a strong statement on? Sure it would seem reasonable that the SEC is investigating GFCI but we still have nothing of substance to base it on.
Way to go BBB. I have little doubt that you and Laserman (gee I wish he were still here and active)have a very comprehensive dossier on GRIFCO, JD, et. al. What I would like to see from BBB or anyone else that has a similar dossier and the intelligence to put it all together in a logical point by point (bullet style with footnote references to sources) that would be of interest and give direction to the SEC investigators. There are so many fraudulent, or at best seriously misleading, statements issued publicly with the intent to encourage even seasoned investors to jump in to this stock. BBB enthusiastically posted how few of the pinkies that actually move to NASDAQ or higher. None of us would be here if we even had the slightest hint of a SCAM. If it is a SCAM it has been very well orchestrated and it will take very close scrutiny to establish blame and liability on the appropriate parties. So, to the one who is able, post a comprehensive outline of what needs to be investigated. Go for it!!!
Again, let's return to the constructive efforts to restore shareholder value or see to the scammers or duly prosecuted and pay the appropriate penalties for their deeds.
I am long and will pay my proportionate share of private litigation if it all comes to that. LET'S DO IT!!!
By the way, what ever happened to Yes 11NY?
Printmail, so what has this investigation has to do with any complaints we shareholders have submitted to SEC? I want to see something that ID's a SEC investigation into what we as shareholders have been screaming about!!!
Sorry, wrong Andy.
Trinityz, I do not consider the remarks in CTBG's 3rd amendment to be proof that JD's conduct as CEO of GRIFCO's operations is being FULLY investigated by the SEC. We have no real indication at just whast the SEC may be looking at. I have read that a multitude of shareholders have complained to the SEC about JD. Has any one of them received any indication that THEIR complaints are being looked into? And what if they are, can anyone say that this is going to restore any value whatsoever to GFCI's share price? Notwithstanding BBB's extended analyizations, where is the substance behind such optimism if we really believe JD is the liar we think he is? Will SEC replace JD with a more competent CEO or in anyway protect whatever assets might actually exist? Of course not. Is there anyone who can truthfuly answer the question "IS THERE ANY HOPE LEFT FOR INVESTORS IN GFCI" with something substantial to hang one's hope on no matter how slim that hope may be? We have no assurance that there is a pot of money awaiting shareholders from the sale of GOTL. What about the settlement of RR suit, where is that money coming from. What we need is some truth from a liar that the liar can be held accountable for. Fat chance! I contacted the SEC regarding CKYS and got no reply as to tapping fair funds for my loss in that scam. Looks like more money down the toilet to me. Alas, alas.
Greetings fellow-board members. I am a brand spanking new poster to Ihub and my interest is in GFCI and CTBG. I bought into GFCI for all the same reasons everyone else did and am greatly disappointed in what has happened to my investment. I am holding on to the slimmest of hopes that somehow, someway, the protectors of fair-play, will bring to bear whatever powers exist to bring Jim Dial, et al, and any other schemers, wrongdoers, and/or villainous characters to heel and execute appropriate punishment where due, and restore to honest investors whatever losses they may have been swindled out of.
I have been reading this and other boards for more than 1-1/2 years and I am saddened by the vitriol, veiled threats, and outright lies tossed about with complete abandon and accomplish nothing except to, perhaps tickle some individual’s ego. Thank you to those posters, whether deemed a pumper or a basher, who put forth competent evidence with available source data to support their arguments. I have little patience with those who simply rail or posture on whatever position or hope they may have.
While I am in hopes that the SEC is scrutinizing JD’s conduct as CEO and will ferret out any and all misconduct on his or anyone else’s part, I have very little faith in the SEC ability to do so or be of any help whatsoever to we unfortunate investors who hold stock worth only a small fraction of its purchase value. Will the present prosecution of the Uselton’s succeed?? Even if it does, how will that help the GFCI investors? I do not see how that investigation will encompass any misconduct of JD beyond that limited scope. I have seen absolutely no evidence or indication that the SEC or any other Federal or State government entity is investigating JD as CEO of GFCI or any of its “extensions” (FTXN, PDEI etc. etc.) for misconduct that would in any way benefit we investors. If any poster has any such CONCRETE EVIDENCE of such an investigation, let him (or she) so post it or give me the post(s) where it has been previously posted.
I have nothing to gain by selling out a position at .038% of it’s purchase value. However, I have the slimmest of hopes that our Government Law Enforcement and/or Protective Agencies that are responsible for ferreting out fraud and misconduct may somehow intervene to restore some additional value to my investment. Evil may yet be turned against itself as there is no honor amongst thieves. Perhaps, just PERHAPS....GLTA