Press Release: SEC Charges Recidivist and Four Others in Oil-And-Gas Offering Frauds
SEC Charges Recidivist and Four Others in Oil-And-Gas Offering
Litigation Release No. 25433/ July 1, 2022
Securities and Exchange Commission v. William Glen Baker,
Michael Bowen, Cannon Operating Company LLC, North Texas Minerals
LLC, and Chol Kim (a/k/a Brandon Kim), No. 3:22-cv-01415-S N.D.
Tex. filed June 30, 2022)
The Securities and Exchange Commission charged William Glen
Baker, recidivist Michael Bowen, Cannon Operating Company LLC, and
Chol Kim for their roles in raising approximately $2.2 million from
more than 140 investors through the fraudulent and unregistered
sale of working interests in four Oklahoma wells.
According to the SEC's complaint, from January 2018 to September
2020, Baker and Bowen made numerous material misstatements and
omissions while raising approximately $2.2 million for Cannon.
Specifically, the complaint alleges that they misrepresented the
performance of Cannon's earlier wells, failed to disclose prior
criminal and regulatory actions, misled investors about the
prospects for well production, and failed to disclose the use of
investor funds to pay sales commissions. The complaint also alleges
that instead of drilling and operating the wells, Baker and Bowen
misused investor funds, and that Baker spent investor funds on
shopping sprees, entertainment, and personal travel. The complaint
further alleges that Baker, Bowen, and Kim acted as unregistered
brokers when selling the working interests.
The SEC also charged Baker and his company North Texas Minerals
LLC (NTX) with additional fraudulent conduct that occurred in June
2019, when Baker and NTX convinced one investor to open a
self-directed IRA to buy a mineral interest owned by NTX. However,
the complaint alleges NTX never owned the mineral interest, and
that Baker misappropriated the investor's entire $126,000
investment for personal use.
The complaint, filed in federal district court in Dallas,
charges Baker, Bowen, Cannon, and NTX with violating Sections 5(a),
5(c), and 17(a) of the Securities Act of 1933, and Section 10(b) of
the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The
complaint further charges Baker, Bowen, and Kim with violating the
broker registration provisions of Section 15(a) of the Exchange
Act. The SEC seeks permanent injunctions, disgorgement with
prejudgment interest, and civil penalties against all defendants;
conduct-based injunctions against Baker, Bowen, and Kim; and
officer-and-director bars against Baker and Bowen.
The SEC's investigation was conducted by Jeaneen Kappell and
Ayesha Ahmed, and supervised by Jim Etri and Eric Werner. The SEC's
litigation will be led by Janie Frank and supervised by B. David
Fraser. The SEC appreciates the assistance of the Texas State
(END) Dow Jones Newswires
July 01, 2022 09:02 ET (13:02 GMT)
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