U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22954 / March 28, 2014
Securities and Exchange Commission v. Jason A Halek, Joshua D. Spivey, Patrick J. Booths and Steven J. Little, Civil Action No. 3:14-cv-01106-D (NDTX) (March 28, 2014)
SEC Charges Four Texas Residents for Selling Fradulent Oil and Gas Investments
On March 28, 2014, the Securities and Exchange Commission filed suit in United States District Court in Dallas, Texas, alleging that from September 2009 to June 2010, Jason A. Halek of Southlake, Texas and Patrick J. Booths of Fort Worth fraudulently conducted unregistered securities offerings of working interests in oil and gas projects that were owned and operated by Halek's company, Halek Energy, LLC. These projects were offered to investors by Joshua D. Spivey of Morristown, Tennessee and Steven J. Little of Southlake, Texas, through their separately incorporated companies. Through this alleged scheme, Halek and the other defendants sold more than $5.5 million in Halek Energy oil and gas working interests to more than 100 investors nationwide.
The Commission's complaint alleges that the investments were offered and sold to investors through separately incorporated companies owned and operated by Spivey, Little and a third individual. The Commission contends that these individuals and companies were merely "straw men" who sold and promoted investments in new Halek Energy oil and gas projects. Booths was Halek Energy's Vice President of Sales and Marketing and served as Halek's point man on the alleged scheme. Booths helped Halek recruit the straw men and assisted in facilitating their sale and promotion of Halek Energy projects through their companies.
According to the complaint, offering documents given to investors falsely claimed that the straw men companies owned the oil and gas projects. In fact, none of the companies owned any part of the projects. Rather, the projects were established and owned by Halek Energy and controlled by Halek and Booths. Spivey and Little each received large commissions or other compensation from promoting and selling the working interests for Halek and Halek Energy. Booths was also well compensated for his role in the alleged scheme.
The complaint alleges that Halek conceived of the straw men scheme after the Commission began investigating his involvement in an earlier scheme to make fraudulent oil-and-gas securities offerings. As a result of that earlier scheme, the Commission sued Halek and Halek Energy in August 2010. Lit. Rel. No. 21637. The Commission contends that Halek intended the straw men scheme as a means for avoiding the Commission's scrutiny.
The Commission charges Halek and Booths with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 ("Securities Act") and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. In addition, the Commission charges Joshua Spivey and Steven Little with violating Sections 5(a), 5(c), 17(a)(2) and 17a(3) of the Securities Act and Section 15(a) of the Exchange Act. Without admitting or denying the allegations in the complaint, defendants Booths, Spivey, and Little have agreed to injunctions against violations of these provisions, and to follow-on administrative bars that would bar them from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, or from participating in any offering of a penny stock. The Commission is seeking civil penalties and disgorgement with prejudgment interest against each defendant.
This matter was investigated by Mark Pittman and Ty Martinez, under the supervision of Jonathan P. Scott, all of the Fort Worth Regional Office. Jennifer Brandt will lead the litigation.