South Florida, including Boca Raton, Fort Lauderdale and West Palm Beach Boiler Room Fraud and Misrepresentation Litigation Attorney
Securities and Exchange Commission v. Commodore Financial Corp., et al., Civil Action No. 15-CV-01567 (C.D. Cal., filed September 30, 2015)
SEC Charges Orange County Oil and Gas Company, CEO, and Arizona Boiler Room Operator with Defrauding Investors
The Securities and Exchange Commission recently announced fraud charges against an Orange County, Calif. oil and gas company, its CEO, and an Arizona-based boiler room operator.
The SEC alleges Commodore Financial Corporation, CEO Christopher Schlegel, M&G Cap Services, and Andres Calvo raised approximately $7.5 million from at least 84 investors through their fraudulent offer and sale of fractional interests in oil and gas wells. According to the SEC’s complaint, filed on September 30, 2015 in the U.S. District Court for the Central District of California, Commodore and Schlegel engaged in a scheme to defraud investors by misappropriating almost half of investor funds to pay exorbitant commissions to Calvo and his boiler room operation as well as for Schlegel’s own personal use, which included private jet charters and Las Vegas casino expenses.
The complaint alleges Commodore and Schlegel compounded their fraud by falsely telling investors that the vast majority of their money-80% to 90%-would be used to fund oil and gas operations, and that Commodore was an experienced, Texas-based oil and gas company with a proven track record of profitability. The complaint further alleges that only about half of investor funds went toward oil and gas operations. In addition, the complaint alleges that Commodore had no real Texas presence, and neither Commodore nor Schlegel had any actual oil and gas experience, let alone a proven track record of profitability. Further, Commodore and Schlegel allegedly falsely represented to existing investors that Commodore was almost finished preparing checks to pay returns on their current investment in order to solicit investments for a new project. According the complaint, however, the current investment had not yet generated any revenue. M&G and Calvo also lied about the exorbitant commissions they actually received.
The Commission alleges that defendants violated Section 5 of the Securities Act of 1933 and the antifraud provisions of the securities laws in Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act. Finally, the complaint alleges that M&G and Calvo violated Section 15(a) of the Exchange Act by acting as unregistered broker-dealers. The SEC’s complaint seeks permanent injunctions, civil penalties, disgorgement plus prejudgment interest, and other relief against all of the defendants.
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At the Boca Raton Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.