U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21226 / September 28, 2009
Securities and Exchange Commission v. George Wesley Harris and Giant Operating, LLC, Defendants, and Stephen Christopher Plunkett, Giant Petroleum, Inc. and DSSC Operating LLC, Relief Defendants, Civil Action No. 3:09-cv-01809-M (N.D. Tx)(September 28, 2009)
SEC Charges Texas Oil and Gas Boiler-Room with Fraud
On September 28, 2009, the Securities and Exchange Commission ("Commission") filed an emergency civil injunctive action against George Wesley Harris and Giant Operating, LLC for their roles in defrauding investors in oil and gas securities offerings.
The Commission's complaint alleges that, from at least December 2007 through the present, Harris and Giant have raised over $13 million from 150 investors located throughout the United States in at least five oil-and-gas securities offerings. The complaint alleges that the five offerings, which were not registered with the Commission, as required under the law, were sold through an unregistered boiler-room located in Irving, Texas. The Commission's complaint also alleges that Giant and Harris offered and sold these securities by making material misrepresentations regarding, among other things, the use of offering proceeds, investment returns, and purportedly lucrative contracts with third parties. The Commission's complaint further alleges that Harris misappropriated and misapplied at least $2 million of the offering proceeds by, among other things, transferring funds to Giant Petroleum and DSSC, two companies that Harris owns and controls, and to Plunkett.
The Commission's complaint, filed in United States District for the Northern District of Texas, alleges that Giant and Harris violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission's complaint also names Stephen Christopher Plunkett, Giant Petroleum, Inc. and DSSC Operating LLC as relief defendants.
Without admitting or denying the allegations contained in the Commission's complaint, Giant and Harris have consented to the entry of a preliminary injunction, asset freeze, accounting, an order preserving documents, expedited discovery, and to the appointment of a Receiver. The Commission also seeks permanent injunctions against further violations of the securities laws, disgorgement plus prejudgment interest, and civil money penalties from Harris and Giant. The Commission also seeks an asset freeze, accounting, and an order preserving documents against the relief defendants in order to recover all investor funds improperly obtained by them.