SEC Charges Former Managers of Oil and Gas Offerings and Crowdfunding Portal

ADMINISTRATIVE PROCEEDING
File Nos. 3-20087, 3-20088, and 3-20089

September 28, 2020 - The Securities and Exchange Commission today announced settled charges against Raymond Allan Fine, David Taylor, and Scott Bachman in connection with oil and gas drilling projects conducted by Texas-based Crudefunders, LLC, an unregistered, online equity crowdfunding portal.

The SEC's orders find that Fine and Taylor, who were both owners and managers of Crudefunders, made undisclosed withdrawals of investor funds earmarked for use in an oil-drilling project called "Morbitzer #1," and used the funds to pay for Crudefunders' general business expenses and to make payments to themselves and their employees. The SEC's orders find that both Fine and Taylor played a role in Crudefunders' solicitation of investors for the Morbitzer #1 offering and also controlled the funds submitted by investors, though neither was registered as or affiliated with a broker-dealer. The SEC's order against Fine further finds that he negotiated agreements, submitted filings to the Commission, and oversaw the use of investor funds in connection with two subsequent offerings carried out through Crudefunders' web site without registering as a broker-dealer. The SEC's order against Bachman finds that he directed a Crudefunders employee to solicit investors in a separate offering and oversaw the use of investor funds, despite neither Bachman nor the employee registering as or affiliating with a broker-dealer.

The SEC's orders find Fine and Taylor violated the antifraud provisions of Section 17(a)(2) and 17(a)(3) of the Securities Act of 1933 and that Fine, Taylor, and Bachman violated the broker-dealer registration provisions of Section 15(a) of the Securities Exchange Act of 1934 and the securities registration provisions of Section 5(a) and 5(c) of the Securities Act. Without admitting or denying the SEC's findings, Fine, Taylor, and Bachman consented to cease-and-desist orders and securities industry bars. Additionally, Fine agreed to pay disgorgement of $110,000, Taylor agreed to pay disgorgement of $60,000, and Bachman agreed to pay an $8,824 civil penalty. The orders establish a fair fund for distribution to harmed investors and waive all but $21,000 and $15,000 of the disgorgement ordered as to Fine and Taylor, respectively, on the basis of their sworn statements about their current financial condition. The SEC's order concerning Taylor acknowledges that Taylor provided cooperation to the SEC staff, and notes that he voluntarily provided information that accelerated the investigation.

The SEC's investigation was conducted by Eric Day, and was supervised by Mark Cave and Anita B. Bandy.