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SEC Bars Former Broker for Oil and Gas Ponzi Scheme

The Securities and Exchange Commission has barred former broker, Rodney Pope, for his role in a Ponzi scheme while serving as chief executive officer of the Texas Energy Mutual LLC, an oil and gas company headquartered in Grapevine, Texas.

The Securities and Exchange Commission has barred former broker, Rodney Pope, for his role in a Ponzi scheme while serving as chief executive officer of the Texas Energy Mutual LLC, an oil and gas company headquartered in Grapevine, Texas that offered investors securities in the form of units in oil and gas drilling programs.

As previously reported in The DI Wire, Pope served as the public face of Texas Energy Mutual because his partner James VanBlaricum was a known securities fraud recidivist. The complaint alleges that the pair defrauded investors between May 2013 through August 2016.

While VanBlaricum directed the day-to-day operations under an alias, the SEC alleges that Pope marketed and sold unregistered securities to investors and created offering materials and the company’s website, which contained misleading and false information. He also supervised a sales team and received transaction-based commissions without being registered as a broker.

Texas Energy Mutual investors, who were promised returns of 10 percent, were told that the drilling programs were productive and profitable, when in fact, many of the wells were dry.

In typical Ponzi fashion, the company used investor funds to make payments to other investors, and to pay personal expenses and undisclosed sales commissions.

Pope was registered as a broker with Texakoma Financial from 1997-1998 and with Lone Star Securities and Morgan Spaulding between 2000-2003. He previously held FINRA Series 22 and Series 63 licenses.

In addition to the SEC action, Pope pleaded guilty in a parallel criminal case brought by federal authorities and was sentenced to 48 months in prison, followed by three years of supervised release. He was ordered to pay $13.5 million in restitution along with the other criminal defendants.

Pope has a number of criminal and disciplinary actions on his BrokerCheck report dating back to 1977. In 2002, the California Department of Corporations filed a cease and desist order against him for publicly solicitating an oil and gas offering without supervision at Lone Star Securities, a firm that was expelled from FINRA in 2011.

In 1997, the Texas State Securities Board issued a $500 fine against Pope for failing to disclose his history of writing bad checks, which occurred six times from 1977-1996. He was also terminated for stealing a $499 VCR while employed at Radio Shack in 1987.

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