UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21997 / June 13, 2011
Securities and Exchange Commission v. Norman Forrest Germany, et al., Civ. Action No. 3:11-CV-1252 (United States District Court for the Northern District of Texas, Dallas Division).
SEC Charges Fraud in Oil and Gas Offering
On June 10, 2011, the Securities and Exchange Commission filed suit in U.S. District Court for the Northern District of Texas against Norman Forrest Germany and two companies he controls – E.B. Germany & Sons, LLC and Germany Energy Company – for conducting a fraudulent, unregistered offering of oil and gas-related securities. The Commission alleges that, from 2008 until May 2010, Germany and his companies raised more than $600,000 through the sale of promissory notes and interests in two Mississippi oil and gas projects. Among other things, the Commission contends that Germany falsely claimed that certain wells were “producing” when he knew they were not, and that, instead of using offering proceeds for oil and gas related expenditures, as represented to investors, Germany diverted these funds to personal expenses.
The Commission’s complaint alleges that Germany violated the Sections 5(a) and (c) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without admitting or denying the Commission’s allegations, Germany and his companies settled the Commission’s charges by consenting to permanent injunctions against further violations. The court will determine the amount of disgorgement and civil money penalties to be assessed against the defendants.