SEC Charges Tycoon Energy and its President with Running a $5.6 Million Oil and Gas Scheme
Sept. 12, 2016
The Securities and Exchange Commission charged Tycoon Energy, Inc. and its president, Matthew Dee Nerbonne, with orchestrating a widespread oil and gas fraud.
The SEC's complaint 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. The complaint further alleges that 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; they also 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, Tycoon 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. 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.
The SEC's investigation was conducted by Richard Zadina and supervised by Eric Werner and David Peavler of the Fort Worth Regional Office. The litigation will be led by Timothy McCole. See here for more information.