SEC names two Dallas oil and gas promoters in fraud complaint
Two Dallas promoters raised $10 million from 300 investors nationwide through fraudulent offers and sales of oil and gas joint venture interests, the US Securities and Exchange Commission charged on May 7.
It filed a civil injunctive action in US District Court in Dallas alleging that Hartmut T. (Hardy) Rose and James Patrick Reedy acted through Geo Companies of North America Inc., Geo Natural Resources Inc. and Geo Securities Inc. between August 2003 and August 2005.
The SEC's complaint said that the pair made numerous false and misleading representations and omissions in connection with the offers and sales of the interests, including Reedy's touting Geo's successful track record when, in reality, the firm had very few wells producing commercial quantities.
It also charged that in several instances, Rose and Reedy solicited funds from investors to complete wells without disclosing that Geo's geologists advised against completing them. Finally, the complaint alleged that Rose and Reedy sought additional money from investors by falsely portraying prior wells as successfully when they were actually dry holes.
It sought permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties against the pair. Rose settled the charges by agreeing to pay $58,914 in disgorgement, $22,749.29 of prejudgment interest and a $50,000 penalty, the federal securities agency said. Litigation continues against Reedy, it indicated.
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