Oil and gas fraud cases on the rise

The Ft. Worth Securities Exchange Commission is “Inundated” with oil and gas fraud cases targeting pre-retirees and retirees with large retirement accounts.

SEC task force dealing with increase in oil and gas fraud
BY LESLIE WIMMER
June 28, 2010

The Fort Worth office of the SEC also is looking to hire someone with oil and gas industry expertise to help them work through the high volume of fraud cases.

Here are the most recent scammer tactics:

• blind phone calls
• high pressure sales pitch
• immediate decision
• promises high returns and low risk

The phone call comes well before the “offering” or “disclosure” document with the fine print. Most people buy the scam before they receive the fine print because the scam is pitched by professional scammers.

Today, scammers have learned that victims rarely will read the fine print in the offering documents, and that lies in offering documents can be used against them in court, Korotash said. Now scammers have begun disclosing the information in print that they used to lie about, which creates a built-in defense for a possible court case. The lies about risk, return and practices related to the securities now come in the initial pitch phone call, which in court becomes a he-said, she-said situation, Korotash said.

To protect yourself from these scammers request the following information in writing:

• information on the scammer speaking to you
• the company’s executives
• number of wells drilled versus number completed
• all information and claims made over the phone
• full offering document (to compare with phone claims)

The most important piece of advice from the article:

“Any oil and gas investment is a speculative investment,” Fayh said. “When somebody tells you it’s a sure thing, it’s not true in oil and gas.”

For more information on investing in oil and gas and particularly in Chesapeake Energy, CHK see Shareholders AND poor African Americans get drilled by CHK and don’t miss the comments. Also see Shale Gas Shell Game.

Read the fine print, People!