Purveyors of Fraudulent Oil and Gas Investments Found in Contempt of Court

On August 9, 2016, a federal court in Texas entered contempt orders against Sameer Sethi, Praveen Sethi, and John Weber after they violated the court's May 26, 2015 preliminary injunction restraining Sameer Sethi and Sethi Petroleum, LLC from participating in oil and gas securities offerings. The Honorable Amos L. Mazzant, U.S. District Judge for the Eastern District of Texas, entered the order after finding that the defendants had created Cambrian Resources, LLC in order to evade the Court's injunction and continue to raise investor funds.

In finding the defendants in contempt of its injunction, the Court articulated 22 specific facts - "an extraordinary amount of evidence" - that "demonstrate that the creation and operation of Cambrian by Sameer, Praveen, and Weber was nothing more than an attempt to evade the Court's injunction and continue utilizing Sameer's skills in selling securities."

The Court rejected the defendants' arguments that the Cambrian interests were structured in such a way to be exempt from the federal securities laws, finding that investors had "a complete dependency on Cambrian," making the Cambrian interests investment contracts and subject to securities laws. The court ruled that "[t]he actions taken by Sameer, Praveen, and Weber clearly violated both the spirit and the letter of the Court's order. This is supported by clear and convincing evidence that the parties deliberately attempted to disguise the nature of their involvement with Cambrian and the illusory nature of the interests that Cambrian was selling."

The SEC's investigation was conducted by Samantha S. Martin, Keith Hunter and Jessica B. Magee of the SEC's Fort Worth Regional Office. Ms. Magee, Matthew J. Gulde, and Timothy L. Evans are conducting the Commission's litigation. The case is supervised by David L. Peavler.

For additional information, see Litigation Release No. 23615.