SEC files charges in oil investment scheme
Nick Snow
OGJ Washington Editor
WASHINGTON, DC, Mar. 31 -- The US Securities and Exchange Commission charged a Los Angeles man and two of his companies with securities fraud on Mar. 24 and moved to halt their oil and gas investment sales.
The commission obtained an emergency court order from a federal district court in Los Angeles to freeze the assets of Clement Ejedawe, also known as Clement Chad, and his companies, Innova Energy LLC and Innova Leasing & Management.
SEC said in its complaint that Ejedawe and his companies raised $1.3 million from 30 investors by promising guaranteed returns on working interests in oil and gas leases or drilling equipment. In fact, it continued, the money was used to pay sales commissions; small amounts to complaining investors; and Ejedawe's personal expenses, including cash withdrawals, his apartment rent, and donations to his church
The complaint said that since December 2006, the defendants solicited investors by cold-calling them from a Los Angeles boiler room where they said money would be invested in oil and gas lease or equipment working interests and promised monthly payments of $4,000-5,000 for every $50,000 invested.
SEC said that in their solicitations, representatives did not disclose that Ejedawe is the subject of at least seven separate cease-and-desist or desist-and-refrain orders relating to his unregistered offering of securities, including orders from California, Alabama, Pennsylvania, Maryland, Kansas, and Washington.
SEC said a hearing on whether a preliminary injunction should be issued against the defendants is scheduled for Apr. 6. It also is seeking permanent injunctions, disgorgement, and civil penalties against Ejedawe and the Innova entities.
Contact Nick Snow at [email protected]