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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21891 / March 18, 2011

SEC v. St. Anselm Exploration Co. et al., Civil Action No. 11-CV-00668 REB MJW (D.Colo)

SEC Charges Officers of St. Anselm Exploration Co. with Fraud

The Securities and Exchange Commission (Commission) filed a civil injunctive action yesterday in the United States District Court for the District of Colorado charging Denver-based St. Anselm Exploration Co. (St. Anselm); its three principals, Michael A. Zakroff, Anna M.R. Wells, and Mark S. Palmer; and Steven S. Etkind, its vice president of corporate development, with securities fraud. Specifically, the Commission’s complaint alleges that from at least January 2007 through August 16, 2010, the Defendants engaged in a fraudulent high-interest promissory note program to fund St. Anselm’s operations.

The Commission’s complaint specifically alleges that defendants Zakroff, Wells, and Palmer, all of whom reside in Colorado, and Etkind, who resides in New Mexico, solicited investors in New Mexico, Colorado, and other states and offered high annual investment returns ranging from 18-36%. The complaint also alleges that as of September 30, 2010, St. Anselm owed approximately 200 investors a total of over $62 million in outstanding notes. The complaint further alleges that the Defendants solicited investors by falsely representing and implying that St. Anselm was profitable and able to pay investors both from the recurring revenue from oil and gas production and from the larger, but less frequent, sales of asset packages. The complaint also alleges that the Defendants failed to disclose to investors St. Anselm’s true financial condition and that St. Anselm depended on the proceeds of new promissory note sales to service its debt. In fact, from January 2007 to August 16, 2010, St. Anselm had paid investor returns and note redemptions almost exclusively with funds from other investors in Ponzi-like fashion.

The Commission’s complaint alleges that all of the defendants violated the antifraud provisions of the securities laws in Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933. The Commission’s complaint seeks preliminary and permanent injunctions, third-tier civil penalties, disgorgement plus prejudgment interest, and other relief.

 

 

http://www.sec.gov/litigation/litreleases/2011/lr21891.htm


Modified: 03/18/2011