U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21212 / September 16, 2009
SEC v. Tony E. Morrison and Texas Securities Partners LLC, Civil Action No. 4:09-cv-00467 U.S.D.C./Northern District of Texas (Dallas Division)
SEC SUES TONY E. MORRISON AND TEXAS SECURITIES PARTNERS FOR AN UNREGISTERED OIL AND GAS OFFERING FRAUD, AND BARS MORRISON FROM THE INDUSTRY
On September 15, 2009, the United States Securities and Exchange Commission (Commission) filed a civil action against Tony E. Morrison and Texas Securities Partners LLC (TSP). In its complaint, the Commission alleges that from January 2005 through June 2008, TSP, at Morrison's direction, sold fractional interests in oil and gas offerings. According to the complaint, TSP raised $12.7 million from over 500 investors nationwide by making material misrepresentations regarding past performance, expected returns, and risk. More specifically, the complaint alleges that TSP representatives told investors: (i) a previous offering provided a $30 million return to investors; (ii) the investment would pay out 80% to 120% cash-on-cash return in the first year; (iii) no project had resulted in a dry hole; and (iv) the investment was a "sure thing." The complaint further alleges that contrary to these statements, none of TSP's offerings returned investor principal or profit and three of the wells resulted in dry holes. In addition, the complaint alleges that TSP's offerings were not registered with the Commission and were not otherwise exempt from registration.
Without admitting or denying the allegations in the complaint, Morrison and TSP consented to the entry of a final judgment enjoining them from 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, and holding them liable, jointly and severally, for disgorgement of $1.2 million plus prejudgment interest of $52,802.44. Based on the defendants' sworn financial statements and supporting documents, the judgment does not order Morrison or TSP to pay civil penalties, and waives payment of disgorgement and prejudgment interest.
Morrison also consented to the entry of an order in a follow-on administrative proceeding barring him from association with any broker or dealer.
The Commission acknowledges the assistance of the Financial Industry Regulatory Authority (FINRA) in this matter.