Securities Regulators Issue Warning- Oil & Gas Investment Fraud

The North American Securities Administrators Association (NASAA) was formed in 1919 and is comprised of  the state securities regulators.

NASAA has issued a warning to investors regarding oil & gas scams. Here is a link to the entire article.


The SEC has also issued a warning to investors: Oil and Gas Scams: Common Red Flags and Steps You Can Take to Protect Yourself. You should read it if thinking of investing in oil and gas.

Every investor contemplating an investment in an oil and gas limited partnership, private placement offering, Reg D offering or other form of entity should take the time to read the articles.

From the NASAA article, here are some of the misrepresentations investors should be aware of in the high pressured sales pitch that many promoters use when cold calling or sending unsolicited emails:

  • you will have an interest in a well that cannot miss
  • the risks are minimal
  • a geologist has given the sales person a tip
  • the salesperson has personally invested in the venture
  • the promoter has a "hit" on every well drilled so far
  • there has been a tremendous "discovery" in adjacent field
  • a large, reputable oil company is operating or planning to operate in the area
  • only a few interests remain to be sold and you should immediately send in your money in order to assure the purchase of an interest
  • this is a special private deal open only to a lucky chosen few investors

Oil & gas private placements are extremely speculative in nature. The risk associated with these investments is only suitable for those individuals who understand and are financially capable of taking the risk inherent to these products. If you were sold an oil & gas investment based upon misrepresentations, such as the inaccurate representation of the production of wells in the target area, or if this type of investment is unsuitable for a person your age and profile, you may be able to recover all or a part of your losses through FINRA arbitration. 

Please read the SEC & NASAA warnings linked above before parting with your hard earned dollars.

If you have questions about losses on oil & gas investments or other stock market losses call to speak with an experienced securities attorney.

Nationwide representation.

Rex Securities Law

561 391 1900

 
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