Articles Posted in Oil and Gas Claims

Texas-Based Brokerage Firm Accused of Inadequate Supervision Involving VA Exchanges
The Financial Industry Regulatory Authority is ordering IMS Securities Inc. to pay a $100K fine. The Texas-based brokerage firm is accused of failures related to its monitoring of variable annuity exchanges. By settling, however, it is not denying or admitting to the allegations. 
According to the self-regulatory authority, the firm exhibited inadequate supervisory procedures for “problematic rates of exchange” in transactions involving variable annuities. FINRA claims that from 7/ 15/13 through 7/8/14, IMS Securities depended on its CFO to review annuity exchanges but did not provide tools or guidance to help look for “problematic rates of exchange.”  The broker-dealer is accused of not probing possibly “problematic patterns” of VA exchanges and not enforcing written supervisory procedures related to consolidated reports. 

Sethi Petroleum Inc. and its founder Sameer P. Sethi are asking a federal judge to send the U.S. Securities and Exchange Commission’s fraud case against it to trial. Sethi Petroleum is based in Dallas, Texas.  The regulator had sought summary judgment in the Texas lawsuit, which accuses Sethi Petroleum and Sethi of fraudulently selling securities to investors for a drilling project in Montana and the Dakotas.  However, the two of them claim that a jury needs to decide whether the interests that investors are holding are even securities.

The Commission claims that Sethi raised over $4M in a little over a year for the oil venture with the promise of 20 gas and oil wells. 90 investors in nearly 30 states were promised 62.5% net working interest on these wells. They were purportedly told that wells were already making 1 million barrels/month, when Sethi Petroleum actually only held interests in just eight wells—and not all of them were being drilled—in which investors held only .15 to 2.5% interest. These wells produced far less than the 1 million barrels/month touted, claims the regulator. The actual figure was closer to 9,000 to almost 14,000 barrels/month.

The SEC claims that Sethi invested just $950K of investor funds in the wells, while he used $577K to pay himself and his dad. $1.1M of investor funds purportedly went to employees at Sethi Financial Group, with sales employees getting $1.04M. Seth  is accused of lying about his own record of regulatory and criminal violations and his company is accused of lying when it claimed that it was working with Hess Corp. and Mobil Corp.

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A sharp drop in the stock of SandRidge Energy Inc. (SDOC) has led to catastrophic losses of more than $7 billion for investors. Just last week, SandRidge Energy shares traded down at 3.8%, dropping to $0.0654. More than 2.3 million shares of the stock were exchanged. According to DailyPolitical, SandRidge Energy stock hit a 12-month high of $1.56; its low was $.03. This week, SandRidge Energy said it would not be able to file its quarterly results on time.

Unfortunately, brokerage firms and financial advisers may have recommended SandRidge Energy stock to investors as a safe proposition even for those seeking conservative, low risk investments. Instead, for some investors, the losses have been devastating. reports that the Oklahoma-based oil and natural gas company is doing so poorly that it could file for Chapter 11 bankruptcy by early next month. According to Reuters, the company is talking to creditors about a possible debt restructuring deal. SandRidge reportedly wants creditors to agree on how debt could be lowered with the hope that this would restrict how much time it has to stay in court should it seek bankruptcy protection.

On December 31, the company had $3.6B in debt. Its market capitalization is $70B. It will owe interest on June 1.

Analyst Ratings Network reports that in a recent research note, Zacks Investment Research downgraded SandRidge Energy Inc. to a “sell” rating from a “hold” one. It was just last March that the company reported $.09 earnings/share for the quarter.

SandRidge Energy Stock Claims
Shepherd Smith Edwards and Kantas, LTD, LLP is investigating claims of investors who have lost money in an investment in SandRidge Energy stock that they bought at the recommendation of a financial advisor. Contact our oil and gas fraud law firm today.

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Texas Oil and Gas Ponzi Scam Leads to 13-Year Prison Term
The owner of RHM Exploration has been sentenced to over 13 years months behind bars for a Texas oil and gas Ponzi scam that raised about $4.5M from investors. William Risinger must pay more than $3.7M to those whom he bilked.

Risinger pleaded guilty to criminal charges of money laundering and wire fraud. From 11/10 to 6/14 he stole funds from investors for three gas, oil, and mineral ventures that were scams. Court documents state that he used proceeds from his fraud for his own spending and for ‘lulling” payments to make it appear to investors as if the joint venture they put their money into was running promised.

As part of his sentence, Risinger will spend 160 months in prison and serve three years of supervised release.

Linn Energy Seeks Chapter 11 Bankruptcy Protection
In other oil and gas news, Linn Energy LLC (LINE) has filed for Chapter 11 bankruptcy. The Houston-based company cited weak energy prices as a reason for having to seek protection.

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