SEC v. Clement Ejedawe; Innova Energy LLC; and Innova Leasing and Management, No. LR-20969, Central District of California (Mar. 24, 2009) — Press Release
raw: Innova Energy LLC, et al.
Innova Energy LLC, et al., No. LR-20969 (Mar. 24, 2009)
Clement Ejedawe and his companies, Innova Energy LLC and Innova Leasing and Management, defrauded over 30 investors of at least $1.3 million by falsely promising guaranteed returns on oil and gas investments, while concealing multiple state cease-and-desist orders and diverting funds to personal expenses, leading to an emergency asset freeze and SEC charges under securities laws.
The SEC charged Clement Ejedawe and his companies, Innova Energy LLC and Innova Leasing and Management, with securities fraud for raising at least $1.3 million from more than 30 investors through false promises of monthly returns of $4,000–$5,000 per $50,000 invested in oil and gas leases or equipment. Instead of investing the funds, Ejedawe used them for personal expenses—including rent, cash withdrawals, and church donations—undisclosed commissions, and minimal payouts to a few investors, while concealing at least seven prior state cease-and-desist orders. The SEC obtained an emergency court order freezing assets, preserving documents, and temporarily enjoining further violations, and is seeking permanent injunctions, disgorgement, and civil penalties.
The U.S. Securities and Exchange Commission charged Clement Ejedawe, also known as Clement Chad, and his companies, Innova Energy LLC and Innova Leasing and Management, with securities fraud for operating a boiler-room scheme out of Los Angeles that raised at least $1.3 million from over 30 investors since December 2006. The defendants falsely promised investors guaranteed monthly returns of $4,000 to $5,000 for every $50,000 invested in oil and gas working interests or drilling equipment, but instead diverted the funds to pay Ejedawe’s personal expenses, undisclosed commissions to sales representatives, and only nominal payments to a handful of complaining investors. Crucially, Ejedawe concealed at least seven prior state cease-and-desist orders from California, Alabama, Pennsylvania, Maryland, Kansas, and Washington, which barred him from making unregistered securities offerings. On March 23, 2009, the SEC obtained an emergency court order freezing the defendants’ assets, requiring detailed accountings, prohibiting document destruction, and temporarily enjoining them from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. A hearing on whether to issue a preliminary injunction was scheduled for April 6, 2009, with the SEC seeking permanent injunctions, disgorgement of all ill-gotten gains, and civil penalties. The SEC acknowledged assistance from the Alabama Securities Commission in uncovering the fraud. The case remains pending as the court evaluates further injunctive relief and potential restitution for victims.
Exhibits & Attached Documents (1)
Extracted insights
- $1.30M $1.3 million $1M–$10M
- $50K $50,000 $10K–$100K
- $5K $5,000 <$10K
- $4K $4,000 <$10K
- agency Securities and Exchange Commission
- organization Securities and Exchange Commission
- Securities and Exchange Commission charged a Los Angeles man and two of his companies with securities fraud
- Securities and Exchange Commission obtained an emergency court order to freeze assets and halt an alleged ongoing oil and gas investment scheme
- Innova Energy LLC operated an alleged ongoing oil and gas investment scheme
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 20969 / March 24, 2009 Securities and Exchange Commission v. Innova Energy LLC, et al., United States District Court for the Central District of California, Civil Action No. CV 09-01947 R (AJWx). SEC OBTAINS EMERGENCY ASSET FREEZE TO HALT OIL AND GAS INVESTMENT SCHEME The Securities and Exchange Commission charged a Los Angeles man and two of his companies with securities fraud, and obtained an emergency court order to freeze their assets and halt an alleged ongoing oil and gas investment scheme they have been operating out of a boiler room in Los Angeles. According to the SEC's complaint, Clement Ejedawe, a/k/a Clement Chad and his companies, Innova Energy LLC and Innova Leasing and Management, raised at least $1.3 million from over 30 investors by promising guaranteed returns on working interests in oil and gas leases or oil and gas drilling equipment. In fact, according to the SEC's complaint, the defendants did not use investor funds for the oil and gas business but rather to pay Ejedawe's personal expenses, including cash withdrawals, his apartment rent, and donations to his church. According to the complaint, Ejedawe is the subject of at least seven separate cease-and-desist or desist-and refrain orders relating to his unregistered offerings of securities, including orders from California, Alabama, Pennsylvania, Maryland, Kansas, and Washington. Defendants both misrepresented and failed to disclose these state orders to prospective investors. The SEC's complaint, filed in federal district court in Los Angeles, alleges that since December 2006, the defendants solicited investors by cold-calling them from a boiler room in Los Angeles, California. Defendants are alleged to have falsely represented to investors that their money would be invested in either working interests in oil and gas leases or interests in oil and gas drilling equipment and to have promised monthly payments of $4,000 to $5,000 for each $50,000 invested. Contrary to these representations, defendants used investor funds to pay undisclosed commissions to sales representatives, to pay for Ejedawe's personal expenses, and to make some small payments to complaining investors. Yesterday, the SEC obtained an order (1) freezing the assets of Innova Energy, Innova Leasing and Management, and Ejedawe; (2) requiring accountings; (3) prohibiting the destruction of documents; and (4) granting expedited discovery; and (5) temporarily enjoining the Innova entities and Ejedawe from future violations of 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. A hearing on whether a preliminary injunction should be issued against the defendants is scheduled for April 6, 2009. The SEC also seeks permanent injunctions, disgorgement, and civil penalties against Ejedawe and the Innova entities. The SEC acknowledges the assistance of the Alabama Securities Commission. SEC Complaint in this matter
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 20969 / March 24, 2009 Securities and Exchange Commission v. Innova Energy LLC, et al., United States District Court for the Central District of California, Civil Action No. CV 09-01947 R (AJWx). SEC OBTAINS EMERGENCY ASSET FREEZE TO HALT OIL AND GAS INVESTMENT SCHEME The Securities and Exchange Commission charged a Los Angeles man and two of his companies with securities fraud, and obtained an emergency court order to freeze their assets and halt an alleged ongoing oil and gas investment scheme they have been operating out of a boiler room in Los Angeles. According to the SEC's complaint, Clement Ejedawe, a/k/a Clement Chad and his companies, Innova Energy LLC and Innova Leasing and Management, raised at least $1.3 million from over 30 investors by promising guaranteed returns on working interests in oil and gas leases or oil and gas drilling equipment. In fact, according to the SEC's complaint, the defendants did not use investor funds for the oil and gas business but rather to pay Ejedawe's personal expenses, including cash withdrawals, his apartment rent, and donations to his church. According to the complaint, Ejedawe is the subject of at least seven separate cease-and-desist or desist-and refrain orders relating to his unregistered offerings of securities, including orders from California, Alabama, Pennsylvania, Maryland, Kansas, and Washington. Defendants both misrepresented and failed to disclose these state orders to prospective investors. The SEC's complaint, filed in federal district court in Los Angeles, alleges that since December 2006, the defendants solicited investors by cold-calling them from a boiler room in Los Angeles, California. Defendants are alleged to have falsely represented to investors that their money would be invested in either working interests in oil and gas leases or interests in oil and gas drilling equipment and to have promised monthly payments of $4,000 to $5,000 for each $50,000 invested. Contrary to these representations, defendants used investor funds to pay undisclosed commissions to sales representatives, to pay for Ejedawe's personal expenses, and to make some small payments to complaining investors. Yesterday, the SEC obtained an order (1) freezing the assets of Innova Energy, Innova Leasing and Management, and Ejedawe; (2) requiring accountings; (3) prohibiting the destruction of documents; and (4) granting expedited discovery; and (5) temporarily enjoining the Innova entities and Ejedawe from future violations of 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. A hearing on whether a preliminary injunction should be issued against the defendants is scheduled for April 6, 2009. The SEC also seeks permanent injunctions, disgorgement, and civil penalties against Ejedawe and the Innova entities. The SEC acknowledges the assistance of the Alabama Securities Commission. SEC Complaint in this matter