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Tagged Posts: Avoiding Investment Scams’

Sethi Petroleum, LLC and Tips for Avoiding Investment Scams

June 25, 2015

The Court Grants Relief Requested by the SEC

In SEC v. Sethi Petroleum, LLC, the court granted the relief requested by the agency, including preliminarily injunction, asset freeze, and appointment of a receiver, among other things, pending final judgement.[1]  The court said that the SEC has made a proper prima facie showing that: (i) the defendants directly or indirectly engaged in the violations alleged by the SEC; (ii) there is a reasonable likelihood that those violations will be repeated; (iii) unless restrained, the defendants may dissipate, conceal, or transfer assets that could be subject to an order of disgorgement or an order to pay a civil monetary penalty in this action; and (iv) entry of a preliminary injunction, asset freeze, and order for other equitable relief as set forth below is necessary and appropriate.… Read the rest

Sethi Petroleum, LLC and Tips for Avoiding Investment Scams

June 22, 2015

Sethi’s Alleged Securities Law Violations

The specific false and misleading statements, omissions, and acts that the SEC alleges to form the basis of the enforcement action against Sethi and his company are numerous.  For example:

  • The offering documents represented that 70% of the investment funds would be used to acquire, drill, and complete 20 oil and gas wells, when in fact, the defendants used only 23.5% of the money raised for that purpose;
  • The offering documents represented that Sethi Petroleum, LLC would take 25% of the funds for administration and management of the joint venture, when in reality, it spent more than 76.4%, the majority of which were undisclosed or unapproved expenditures, including $577,000 paid directly to Sethi; and
  • The offering documents also falsely stated that the program would be a “10 million dollar fund that will .
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All postings are intended to be planning tools to familiarize readers with some of the high-level issues discussed therein. No posting is intended to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.