Dallas-Based Oil & Gas Company, CEO Settle $8 Million SEC Fraud Suit
The Securities and Exchange Commission charged a Dallas-based oil-and-gas company and its chief executive officer in connection with a series of allegedly fraudulent unregistered oil-and-gas securities offerings that raised millions of dollars from investors.
The Securities and Exchange Commission charged a Dallas-based oil-and-gas company and its chief executive officer in connection with a series of allegedly fraudulent unregistered oil-and-gas securities offerings that raised millions of dollars from investors.
The SEC alleges that Jefferey Gordon and Texas Coastal Energy Company LLC cold-called investors across the country, soliciting their interest in financing the drilling and completion of oil-and-gas prospects in Kansas and Texas in exchange for a share of future oil-and-gas production revenue.
According to the complaint, Gordon and Texas Coastal used a combination of false and misleading offering materials and sales pitches to deceive investors. Among other things, Gordon is accused of lying to investors about the firm’s experience and track record, the advice and success rate of its geologists, the potential reserves on its prospects, the potential return on investments therein, and the manner in which investor funds would be used.
Ultimately, Gordon and Texas Coastal raised more than $8 million from at least 80 investors. The SEC claims that while the investors lost almost every dollar they invested, the firm and Gordon misappropriated more than $2.6 million for their own use.
Without admitting or denying the SEC’s allegations, Texas Coastal and Gordon agreed to pay disgorgement, prejudgment interest and civil penalties totaling $7.2 million. Gordon also consented to associational and penny stock bars.
