On June 18, 2015, the SEC charged an oil company and its CEO for lying to investors about oil reserve estimates and future drilling plans.
Glen Landry, the CEO of Norstra Energy, published to Norstra’s website, in press releases, and in SEC filings many false and misleading statements about the projected profits and start date of the reserve and drilling.
Landry’s claims misled investors into believing the property was in another location that would make the oil well seem more profitable. In addition, Landry made false statements regarding the start date of drilling plans to make profits seem imminent.
Eric Dany, author of an investment newsletter, was charged along with Norstra and Landry for publishing false advertisement that enticed readers to buy penny stock shares in Norstra Energy. The promotional materials boasted that the wells contained “as much as 8.5 billion barrels of oil!” and promised a 99 percent chance of success for investors. Dany’s exaggerated reports caused Norsta Energy’s stock price to spike almost 600 percent in three months.
Michael Paley, Co-Chair of the SEC Enforcement Division’s Microcap Fraud Task Force, said of Norstra Energy’s CEO, “As a longtime geologist, Landry was well aware that Norstra Energy did not have the oil reserves or drilling plans being touted to investors.” Paley said of Dany, he “knew that claims made about the company were false but touted the stock anyway in a spam email campaign and a hard-copy mailer he was paid to endorse.”
The SEC’s complaint filed in Manhattan federal court charges Norstra Energy, Landry, and Dany with fraudulent actions against investors. The SEC seeks final judgment ordering injunctions, returned gains, and financial penalties. In addition, the SEC asserts to bar Landry from serving as a director or officer of a public company or trading penny stock shares in the future.
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