SEC Obtains Asset Freeze Over Joseph Gabalon
The Securities and Exchange Commission (SEC) filed a civil action against defendants Ascenergy LLC and its CEO, Joseph Gabaldon for offering fraudulent oil and gas investments. At the request of the SEC, the U.S. District Court for the District of Nevada has entered a temporary restraining order halting the offering, as well as an order for an asset freeze for the defendants and the relief defendants, Alanah Energy, LLC and Pyckl, LLC.
The SEC’s complaint claims that since at least 2014, the defendants have been involved in a scheme on crowdfunding websites and the company’s website to solicit investors to buy overriding royalty interests in undeveloped oil and gas wells. According to the complaint, Ascenergy has accumulated about $5 million from approximately 90 investors. Ascenergy has already spent at least $1.2 million of the offering proceeds, but it seems that only a few thousand dollars of the proceeds have been used for expenses relative to oil and gas. Instead, the complaint claims that a significant part of the $1.2 million has been used for payments to Mr. Gabaldon, to the companies he manages, or for expenses that are altogether unrelated to the oil and gas business. Right after the SEC subpoenaed Mr. Gabaldon, Ascenergy allegedly transferred $3.8 million, which was virtually all of the remaining offering proceeds, to Pyckl LLC, a company in San Jose, California that has no apparent correlation to the oil and gas business.
The SEC claims that Ascenergy has also made several material misrepresentations about the company and the nature of the offering. Ascenergy allegedly falsely holds itself out as a credible energy company, and it presents the investment as a novel and very low-risk opportunity that will guarantee investors out-sized returns. The SEC’s complaint states that Ascenergy is offering a high-risk investment in undeveloped and unproven conventional oil and gas wells, in actuality.
The complaint alleges that the defendants violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC is seeking an asset freeze, preliminary and permanent injunctions, disgorgement of all illicit earnings, prejudgment interest, civil penalties, and other ancillary relief against both defendants. The SEC also seeks the return of investor funds from the relief defendants.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
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Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855