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SEC Charges Texas Man and his Companies for Fraudulent Sale of Oil-and-Gas Investments

On April 16, 2020 the Securities and Exchange Commission filed a complaint against Matthew Hilliard and his companies, Hilliard Oil Ventures, Inc., Hilliard Helium Company, LLC and Hilliard Land Energy Companies (collectively “Hilliard companies”) for allegedly selling fraudulent investments in oil-and-gas, and misappropriating investors funds.

Hilliard and Hilliard companies allegedly offered and sold securities in the form of joint venture units in six oil-and-gas joint ventures from 2015 through June of 2019.  Hilliard controlled each joint venture and the information released in public statements and investors disclosures regarding the joint ventures. The SEC alleges Hilliard Companies solicited investors with untrue and misleading statements about the revenue possibilities and omitted past failures necessary to make an adequate investment decision. Hilliard companies’ employees also cold-called potential investors and allegedly shared untrue information from documents provided to them by Hilliard. Hilliard also is alleged to have grossly overstated potential earnings estimates he received from a geologist examination of potential gross revenue.

The SEC alleges Hilliard companies never filed registration statements for any securities they were offering and selling. In total, Hilliard companies raised over $10 million dollars through the alleged fraudulent sale of unregistered securities.

The complaint also accuses Hilliard of comingling investors funds in various accounts he controlled. Additionally, Hilliard allegedly used the funds to pay for personal expenses such as spending at grocery and retail stores, gas stations, and movie theaters. The SEC alleges Hilliard knowingly misappropriated investor funds.

The SEC complaint charges Hilliard and Hilliard companies with violating the registration provisions of Section 5 of the Securities Act of 1933 and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The defendants, without admitting to or denying charges, have agreed to be enjoined from violating the charged provisions. They have also agreed to pay more than $5.3 million in disgorgement of ill-gotten gains, prejudgment interest, and civil penalty. The settlements are subject to court approval.

You can find more information on this case and access the SEC Complaint at the following link https://www.sec.gov/litigation/litreleases/2020/lr24797.htm. If you have any questions about this or other securities-related issues, please contact Tomlinson & Shapiro, P.C. at (312) 715-8770.

 

Michael Shapiro
(312) 715-8770
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