The US Securities and Exchange Commission is charging Matthew Fox and his Wayne Energy LLC with securities fraud. The regulator brought its Texas securities case in federal district court in the city of Sherman.
According to the Commission’s complaint, Fox raised about $950K for a joint venture that was supposedly involved in reworking and recompleting an oil and gas well. However, contends the SEC, Fox raised the funds by recycling offering documents from another oil and gas company that he previously ran (that company failed) rather than customizing the paperwork to this new venture and its specific risks.
Prior to setting up Wayne Energy in 2015, Fox had run Frisco Exploratory Company and it is the latter’s offering documents that he used. The Commission claims that the offering documents made a false statement, which was that Wayne Energy would not commingle its own money with the joint venture’s funds. The documents also falsely stated that the oil and gas company was licensed as an operator with the Texas Railroad Commission.
The SEC claims that Fox misappropriated most of the investors’ funds, spending about $500K on his own expenses, including casino gambling bills, vacations, jewelry, and other spending.
Although not denying or admitting to the SEC’s charges, Fox and his company are settling the Texas securities fraud charges. Not only are they permanently enjoined from violating certain sections of the Securities Act of 1933 and the Securities Exchange Act of 1934 and Rule 10b-5 thereunder in the future, but also they must pay disgorgement, prejudgment interest, and civil penalties. Also, Fox and his Wayne Energies are not allowed to sell or issue securities.
Please contact our Texas securities fraud law firm if you suspect that you may have grounds for filing a claim.
Read the SEC Complaint (PDF)