SEC Charges Tycoon Energy Inc and Its President with Running a $5.6 Million Fraud
The SEC’s complaint, filed on September 9, 2016, in the U.S. District Court for the Eastern District of Texas, alleges that, from 2010 through 2013, Tycoon, a Texas oil and gas company, raised more than $5.6 million from approximately 232 investors nationwide in four unregistered offerings of joint-venture securities in oil and gas projects. Nerbonne drafted and disseminated materially false and misleading offering documents and investment brochures containing baseless projections that four oil-well prospects would produce up to 400 barrels of oil per day. And they allegedly grossly overstated the test results and success of Tycoon’s earlier wells. Nerbonne allegedly induced investors to pay hundreds of thousands of dollars for well-completion costs before Tycoon conducted required testing to determine the wells’ commercial viability. According to the complaint, none of the wells became commercially viable, and in one case, the company never even drilled the well. The SEC alleges that Nerbonne misappropriated approximately $1.5 million of the investment proceeds, which he used to pay for his personal expenses.
The SEC’s complaint charges Tycoon and Nerbonne with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without admitting or denying the allegations of the complaint, Tycoon and Nerbonne have consented to the entry of permanent injunctions with any disgorgement and civil penalties to be determined by the court upon the SEC’s motion. The settlement is subject to court approval.
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. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855