Grifco Inc (GFCI)

[back2basics]

more of the mysterious workings of the SEC & DOJ their wonders to perform: On Apri 30, 2009 the SEC announced"


The Securities and Exchange Commission ("SEC") today filed a settled civil action in the United States District Court for the Southern District of Texas against Golden State Equity Investors, Inc., formerly known as Golden Gate Investors, Inc. ("GGI"), for its alleged violations of the registration provisions of the federal securities laws. The Commission's complaint alleges that, during the period from June 2005 through September 2006, Grifco International, Inc. ("Grifco"), a publicly-traded company that claims to be an international provider of oil and gas services equipment, issued 15,750,000 purportedly unrestricted, nonexempt securities to GGI. The agreements underlying the unregistered stock transactions provided that Grifco would issue GGI large blocks of Grifco stock in return for an up-front monetary advance and a large percentage of the net sales proceeds after the stock was sold. Shortly after receiving its shares, GGI sold its Grifco stock to the investing public and then returned a portion of the proceeds to Grifco. The complaint alleges that none of the securities transactions were registered with the Commission and the transactions did not satisfy any exemption from registration. The SEC alleges that, as a result of this conduct, GGI received nearly $3.8 million from the sale of newly-issued Grifco stock and remitted approximately $2.3 million of those proceeds to Grifco during 2005 and 2006. As a result, GGI's ill-gotten gains on these unregistered securities transactions were $1,269,907.

GGI, without admitting or denying the allegations in the complaint, consented to the entry of a final judgment enjoining it from violating Sections 5(a) and 5(c) of the Securities Act of 1933. The final judgment also orders it to pay disgorgement of $1,269,907, plus $257,672 in prejudgment interest, and to pay a civil penalty in the amount of $50,000.

Dial wasn't mentioned by name in the suit, but he was certainly the person who issued the unregistered shares. From the public perspective he came out of this unscathed.

A little history. In @006 Dial made a big deal of Grifco International acquiring rights to drill and produce natural gas from the Adams Ranch in Crockett Co, TX. After selling millions of shares on the news he announced that GFCI was forming First Texas Natural Gas Corp (FTXN) to operate the Adams Ranch gas play "to protect GFCI shareholders from the liabiltes and risks inherent with the Oil & Gas business." Eventually over 20 productive wells were drilled. I wonder where the money went to?

That was the LAST time Dial ever linked GFCI & FTXN. Millions more shares were sold by FTXN. Along the way, I found 17 other evtities that were claiming the same 9300 acre lease at Adams Ranch.

Three days before the above SEC announcement, Jim Dial trnsfered FTXN to another, now defunct pink RICP.

How in God's name could the SEC have allowed a scam artist like Dial to continue to wheel & del in public securities after their own investigation had shown him to be a f-ing crook, preying on the public?

I know it's just one of the mysteries of how the SEC & DOJ work, but it's the closest one to me.

B2B