SEC Charges Unregistered Sales Agent for Improperly Soliciting Investments in Oil and Gas Ventures
Securities and Exchange Commission v. Chad Anthony Lewis, No. 18-cv-61869 (S.D. Fla. filed August 13, 2018)
On August 13, 2018, the Securities and Exchange Commission filed a civil injunctive action against Chad Anthony Lewis, a Kentucky resident for unlawfully acting as an unregistered broker and selling unregistered investments in two oil and gas companies based in Texas.
The SEC’s complaint, filed in the U.S. District Court for the Southern District of Florida, alleges that Lewis illegally solicited and raised money from investors for Aegis Oil, LLC and 7S Oil & Gas, LLC. Both of these companies offered and sold unregistered securities in the form of “joint venture units” in oil and gas development projects located in Texas.
According to the SEC’s complaint, Lewis, who worked at different times both for Aegis and 7S, helped train a network of sales agents that unlawfully solicited investments for Aegis and 7S and assisted agents in closing sales calls with investors. The SEC alleges that Lewis directly solicited at least one investor, who purchased investments in both Aegis and 7S. Lewis was paid transaction-based compensation in the form of a sales commission of 2% on all investor proceeds raised through the offerings. He also received commissions ranging from 20% to 31% from the proceeds of the investments he sold to one investor. In total, Lewis received about $374,000 in commission payments from the Aegis offerings and $250,700 from the 7S offerings.
The SEC’s complaint charges Lewis with violating Sections 5(a) and 5(c) of the Securities Act of 1933, and Section 15(a)(1) of the Securities Exchange Act of 1934.
Without admitting or denying the SEC’s allegations, Lewis has consented to the entry of a judgment permanently enjoining him from future violations of the above provisions the federal securities laws, and ordering him to pay disgorgement plus prejudgment interest and a civil penalty, in amounts to be determined by the Court at a later date upon motion by the SEC.
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