SEC alleges stock fraud by two oil firms, individual

Nick Snow
Washington Correspondent

WASHINGTON, DC, Sept. 18 -- A federal district judge in Dallas issued a temporary restraining order and asset freeze against two small oil and gas companies and a Los Angeles man in response to US Securities and Exchange Commission allegations of stock manipulation and fraud.

US District Judge Barbara M.G. Lynn of the Northern District of Texas issued the order and freeze Sept. 12 against Terax Energy Inc. of Dallas, Westar Oil Inc. of Beverly Hills, Calif., and Mark Roy Anderson. SEC also ordered a 10-day suspension of Terax's stock, which trades on the over-the-counter bulletin board.

In its complaint, SEC alleged that Anderson gained control of Terax in April. Soon after, the company issued several press releases, which the SEC said were false and misleading, regarding Terax's oil and gas operations and the company's stock price increase to as much as $4.88/share from 30¢/share.

SEC also alleged that Anderson conducted a fraudulent private placement of $1 million of Westar's common stock and made false claims about its oil and gas operations and plans to exchange Westar stock for Terax stock.

SEC said it is seeking permanent injunctions against and civil fines from Terax, Westar, Anderson, as well as Linda Contreras, Anderson's assistant, for violating registration provisions of the 1933 Securities Act. It also seeks disgorgement from Terax, Westar, Anderson and two relief defendants, which it said Anderson controls.

Contact Nick Snow at nsnow@cox.net.

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