Oil and Gas Scams Aren’t Slowing Down

Hugh BerksonA review of the Securities and Exchange Commission’s records reveals that the SEC is pursuing claims related to four oil and gas scams in the last two months alone. The SEC complaints carry common themes: high pressure sales tactics, misrepresentations regarding the use of investor funds and the likelihood of success in drilling operations, and sales of unregistered securities in violation of federal law.  Many of the SEC complaints also alleged that the investor proceeds were used to pay the founders’ personal expenses or high commissions to sales personnel.  None of the scams at issue were promoted by a major brokerage firm like UBS, Merrill Lynch, Wells Fargo, or other household-names.

Oil and Gas Investment Warnings

Not every private transaction of an oil and gas security is fraudulent, but investors should be careful of these common red flags:

  1. high-pressure sales tactics;
  2. promises of high and quick returns;
  3. securities not traded on a major exchange like the New York Stock Exchange, and,
  4. securities not offered by a well-recognized brokerage firm.

Any of these red flags should, on its own, cause an investor to be exceptionally cautious about the promoted investment.  The presence of more than one, or all four, red flags should result in an investor declining the opportunity to fall for the oil and gas scam of the day.

If you find that you have oil and gas investments that haven’t worked out as promised, call Hugh Berkson at (216) 696-1422 or toll free at (866) 932-1295 for a free evaluation of your recovery options.  You can also email us at hdb@mccarthylebit.com.