Court Orders Ex-Spouse and Friend of "Frack Master" to Disgorge a Total of $1.12 Million
Litigation Release No. 24214 / July 25, 2018
Securities and Exchange Commission v. Christopher A. Faulkner, et. al., No. 3:16-cv-01735 (N.D. Tex. filed June 24, 2016)
A federal district court in Texas has separately ordered the ex-wife of Chris Faulkner, the self-proclaimed "Frack Master," and one of his friends, to disgorge a total of more than $1.12 million.
On July 20, 2018, U.S. District Judge Sidney A. Fitzwater entered a final judgment against Tamra M. Freedman, Faulkner's former spouse, ordering her to disgorge $900,000. Judge Fitzwater also entered a final judgment against Jetmir Ahmedi on February 21, 2018, ordering Ahmedi to disgorge $222,000. The SEC named Freedman and Ahmedi as relief defendants to recover ill-gotten gains they received from Faulkner, who the SEC charged along with 11 other defendants for their roles in an alleged $80 million oil-and-gas securities fraud scheme. In settling with the SEC, Freedman and Ahmedi neither admitted nor denied the allegations in the SEC's complaint.
Since the SEC filed its complaint in June 2016, it has partially settled with six defendants-Parker R. Hallam, Dustin Michael Miller Rodriguez, Beth Handkins, Gilbert Steedley, Patriot Energy, Inc., and Crude Energy, LLC-who each agreed to be enjoined from violating various federal securities laws, including the antifraud provisions in Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. All six defendants, who neither admitted nor denied the allegations in the SEC's complaint, agreed to have the court assess the monetary remedies against them upon future motion by the SEC. Additionally, on an emergency motion filed by the SEC, the court froze Faulkner's assets in August 2017 and placed them and two companies he controlled, defendants Breitling Energy Corp. and Breitling Oil and Gas Corp., under the control of a court-appointed receiver. The court also preliminarily enjoined Faulkner and the two companies from violating antifraud provisions of the federal securities laws.
On June 15, 2018, the U.S. Attorney's Office for the Northern District of Texas filed a criminal complaint against Faulkner that alleged, among other things, that Faulkner committed securities fraud, mail fraud, and money laundering.
The SEC's litigation against Faulkner, Jeremy S. Wagers, and Judson F. (Rick) Hoover is ongoing. The SEC seeks permanent injunctions against future violations of various federal securities laws, disgorgement of ill-gotten gains, civil money penalties, and bars from serving as officers and directors of public companies.