SEC Halts Colorado Oil and Gas Fraud
On September 5, 2008, in Colorado, Investor Protection, Investors at Risk, Oil and Gas, Scams, by Investor's Watchblog
Things have come to a pretty pass when we get excited about paying less than $4 per gallon for gasoline. Scam artists know that every American who drives pays attention to the price at the pump. Scam artists also know that they can use that awareness to sell oil and gas scams. The SEC has [...]
Things have come to a pretty pass when we get excited about paying less than $4 per gallon for gasoline. Scam artists know that every American who drives pays attention to the price at the pump. Scam artists also know that they can use that awareness to sell oil and gas scams. The SEC has charged Donald H. Allen, a resident of Colorado Springs, Colorado, and his two wholly-owned companies, H&M Petroleum Corporation (“H&M”) and American Energy Resources Corporation (“AER”) with doing just that. The SEC’s press release reads in part as follows:
[B]etween March 2002 and December 2006, Allen, H&M, and AER raised approximately $9.9 million from at least 355 investors nationwide through a series of unregistered offerings of fractional interests in oil and gas projects. These projects were marketed to the public through cold call telephone solicitations and “seminars” advertised in local newspapers. According to the Complaint, Allen, H&M, and AER defrauded investors by using investor funds for undisclosed purposes, including diverting over $2.3 million to Allen’s personal use. The defendants also misrepresented or omitted material information about their track record, projected return on the investments, and their own investment in the offerings. http://investorswatchdog.com/blog/investorswatchblog/?p=294
Beware any investment that seems to be tied too closely to today’s headlines. Scam artists love to get a head start with prospective investors by pitching investments tied to things that have already cracked the public consciousness.
In the years to come, American ingenuity will provide cleaner, less expensive energy sources. No doubt, private investments will fund those developments, and those investors will be rewarded for their foresight. For every legitimate opportunity, though, there are likely five or more financial scams posing as legitimate alternative energy companies. Given those odds, you would be wise to have a former SEC Enforcement Branch Chief review the offering documents before investing. Had Allen’s victims done so, they’d have saved themselves $5 million. http://investorswatchdog.com/blog/investorswatchblog/?p=294