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Advisor-Sold Direct Investments Offer Multiple Layers of Protection

In the advisor-sold direct investment world, there are several layers of protection for investors, including regulatory oversight, third party due diligence, broker-dealer due diligence, and then the advisor’s review of the offering.

Clients should be reminded of this often.

Here is another reason for doing so:

Quixote Xploration LLC, a privately held resource exploration company specializing in oil and gas investments, has been issued with an emergency cease and desist order. The announcement was made earlier in the week by the Securities Commissioner of Texas.

As stated by the order, James Patrick Bona, CEO of the Houston-based company, failed to disclose to potential investors prior criminal convictions, including a 2013 charge of a fraudulent securities transaction in Florida where Bona lives.

Additionally, the order mentions that Bona was advertising oil and gas investment offerings through the company website among other social media platforms, despite not owning any interest or shares in the South Louisiana prospect.

The order also states that Bona was operating without a proper sales permit and failed to register shares and interests in the prospect.

According to the order, Bona and his company are forced to cease and desist from “offering for sale any security in Texas until it is registered with the Securities Commissioner or obtains an exemption from registration under the Texas Securities Act and engaging in any fraud in connection with the offer for sale of any security in Texas.”