SEC Charges Payson Petroleum Brothers with Fraud

Investment Losses in Payson Petroleum

Did you suffer losses investing in a Payson Petroleum private placement offering?  If so, The White Law Group may be able to help you recover your losses by filing a FINRA Arbitration claim against the brokerage firm that sold you the investment.

According to their website, Payson Petroleum is based in North Texas and “leads the way in providing oil investment opportunities to the independent investor.”

On November 23, 2016, the Securities and Exchange Commission filed a civil action charging brothers Matthew Carl Griffin and William Daniel Griffin with fraudulently offering interests in two Texas partnerships through their company Payson Petroleum, Inc.

Between November 2013 and July 2014, the SEC alleges, the Griffins purportedly conducted a fraudulent two-phase offering of interests in two Texas partnerships, raising $23 million from approximately 150 investors for the purpose of developing three oil and gas wells.

Additionally, the SEC alleges that the Griffins misled investors about Payson’s promised participation in the program and about Payson’s compensation as the program’s sponsor and operator.

Without admitting or denying the allegations in the SEC’s complaint, Matthew Carl Griffin and William Daniel Griffin have each consented to a permanent obey-the-law injunction, disgorgement and a civil penalty in amounts to be determined by the Court.

The Trouble with Alternative Investment Products

Many oil and gas LPs have high expense ratios, and due to the decline in the overall health of the oil and gas market, are suffering. Some are on the brink of default, or worse yet, bankruptcy.  Such an outcome is extreme, but not unforeseen. It only highlights the unsuitability of these investments for most retail investors – particularly in large concentrations.

The trouble with alternative investment products like offerings from Payson Petroleum is that they often involve a high degree of risk and are typically sold as unregistered securities which lack the same regulatory oversight as more traditional investment products like stocks and bonds.  An additional risk inherent to Payson Petroleum offerings is also the general risk that comes with the energy market – a market that has seen enormous losses over the last few years.

Broker dealers that sell alternative investments are required to perform adequate due diligence on all investment recommendations to ensure that each investment is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.

Also brokers can earn high commissions for selling Reg D private placements, which may drive them to push the product to unsuspecting investors who do not fully understand the risks of these types of products.

If a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be liable for investment losses.

Payson Petroleum Offerings

The White Law Group is specifically investigating whether the following Payson Petroleum offerings, among others, where misrepresented by FINRA registered brokerage firms:

Payson Drilling Fund 2015 I
Payson Drilling Fund 2015 II LP
Payson Group LP
Payson North Texas Multi Well I LP
Payson Petroleum Jenny #1 LP
Payson Developmental Drilling Fund 2014 II LP

To determine whether you may be able to recover investment losses incurred as a result of your purchase of or another Payson Petroleum private placement investment, please contact The White Law Group at 1-888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee. For more information on the firm, visit www.WhiteSecuritiesLaw.com.