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U.S. Securities and Exchange Commission


Litigation Release No. 23884 / July 25, 2017

Securities and Exchange Commission v. Petroforce Energy, LLC, et al., No. 1:17-CV-00698

(W.D. Tex. July 24, 2017)

Texas Company and its President Agree to Settle Oil-and-Gas Offering Fraud

A Texas company and its president have agreed to pay nearly $300,000 to settle charges by the Securities and Exchange Commission related to an oil-and-gas offering fraud. The SEC also charged two senior salespeople as unregistered brokers in the transactions underlying the fraud.

According to the SEC's complaint, filed on July 24, 2017 in the U.S. District Court for the Western District of Texas, Austin-based Petroforce Energy, LLC and its founder and president, William Veasey, raised nearly $3.9 million from approximately 80 investors in four fraudulent oil-and-gas offerings. The SEC alleges that Petroforce and Veasey provided investors with offering documents and other materials that contained false and misleading statements about the investments. The documents allegedly misrepresented the nature and extent of certain operational problems that affected an early offering and understated drilling costs and overstated the profitability of the wells. The SEC also alleges that the offering materials misstated the timing and nature of tax benefits associated with investing in the offerings.

The SEC also alleged that Ivan Turrentine and Javier Alvarado, two sales agents employed by Petroforce and Veasey to offer and sell joint-venture and limited partnership interests to investors, and Veasey acted as brokers in Petroforce's securities transactions. The SEC alleges that Veasey, Turrentine, and Alvarado solicited prospective investors and earned money as a result of sales made to the investors. The SEC encourages investors to check the backgrounds of people selling them investments by using theĀ SEC's investor.gov website to quickly identify whether they are registered professionals.

The SEC's complaint charges Petroforce, Veasey, Turrentine and Alvarado with violating Sections 5(a) and (c) of the Securities Act of 1933, Veasey, Turrentine and Alvarado with violating Section 15(a) of the Securities Exchange Act of 1934, and Petroforce and Veasey with violating Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. All four defendants agreed to settle the SEC's charges, without admitting or denying the allegations in the complaint, by consenting to the entry of judgments that impose permanent injunctions against future violations of the charged provisions of the federal securities laws, require Veasey and Alvarado to pay disgorgement and prejudgment interest in the amount of $58,204 and $10,800, respectively, and Petroforce and Veasey to pay civil penalties of $150,000 and $90,000, respectively. The settlements are subject to court approval. Veasey, Turrentine and Alvarado also agreed to the entry of SEC orders, based on the anticipated entry of the final judgments, imposing associational and penny stock bars.

The SEC's investigation was conducted by Michael Jackman and Ty S. Martinez with assistance from Jennifer Brandt, and was supervised by Shamoil Shipchandler, all of the SEC's Fort Worth office.

SEC Complaint



Modified: 07/25/2017