SEC Charges Former President of Tennessee-Based Company for Deceiving Investors as to Role of Two Convicted Criminals in Oil Investment Scheme
Litigation Release No. 24256 / September 5, 2018
Securities and Exchange Commission v. Robert William Dorrance, No. 18-cv-00209-WTM GRS (S.D. Ga. filed August 31 2018)
The Securities and Exchange Commission charged the former president of a Tennessee-based energy company with concealing from investors that two convicted criminals ran the company and led a $15 million oil investment scheme affecting more than 150 investors.
The SEC's complaint alleges that the former president of Southern Energy Group, Inc., Robert William Dorrance, misled investors by failing to disclose that the two individuals actually were running the company instead of Dorrance. Last year, the SEC charged the two ringleaders behind the oil investment scheme for raising millions from investors, telling investors that the funds would be used to acquire interests in wells and to recover oil from wells. Instead, they steered most of the money into advertising, sales commissions, or misappropriated the money for their personal use. With no background in the oil industry, Dorrance's main work experience was as a former stereo salesman. He largely performed clerical and administrative work at the direction of the two convicted criminals.
Dorrance agreed to be permanently prohibited from violating the antifraud provisions of 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, and to pay $101,075 in disgorgement plus interest, and $42,500 in civil penalties, for a total of $143,575.
The SEC's continuing investigation is being handled by Brian M. Basinger, Stephen E. Donahue, and Edward G. Sullivan, all from the agency's Atlanta office. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of Georgia and the U.S. Secret Service.
The SEC's Office of Investor Education and Advocacy has issued an Investor Alert to encourage investors to check the background of anyone selling or offering investments using the free and simple search tool on Investor.gov.