SEC v. KEVIN N. RICHARDS, Central District of California (Dec. 15, 2025) — Complaint

[OCR_UNRECOVERABLE method=recover reason=missing_pdf ts=2026-08-11T14:53:34.678Z]                                                           

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

BRIAN T. FITZSIMONS (pro hac vice pending) 
Email: [email protected] 
Securities and Exchange Commission 
100 F Street N.E. 
Washington, DC 20549-5020 
Telephone: (202) 551-5905 

LOCAL COUNSEL: 

RUTH C. PINKEL (Cal. Bar No. 164470) 
Email: [email protected] 
Securities and Exchange Commission 
444 S. Flower Street, Suite 900 
Los Angeles, CA 90071 
Telephone: (323) 965-3322 
Facsimile: (213) 443-1904 

Attorneys for Plaintiff 
Securities and Exchange Commission 

UNITED STATES DISTRICT COURT 
CENTRAL DISTRICT OF CALIFORNIA 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff,

vs.

KEVIN N. RICHARDS, 

Defendant.

Case No. 8:25-cv-02057

COMPLAINT 

JURY TRIAL DEMAND 

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 1 of 19   Page ID #:1



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

- 2 -

Plaintiff Securities and Exchange Commission (“Commission” or “SEC”), 

for its Complaint against Kevin N. Richards (“Richards” or “Defendant”) alleges 

as follows: 

JURISDICTION AND VENUE 

1. The Commission brings this action pursuant to the authority conferred

upon it by Section 20(b) of the Securities Act [15 U.S.C. §§ 77t(b)], Section 21(d) 

of the Exchange Act [15 U.S.C. § 78u(d)], and Section 209(d) of the Advisers Act 

[15 U.S.C. § 80b-9(d)]. 

2. This Court has jurisdiction over this action pursuant to Sections 20(d)

and 22(a) of the Securities Act [15 U.S.C. §§ 77t(d) and 77v(a)], Sections 21(d) 

and 27 of the Exchange Act [15 U.S.C. §§ 78u(d) and 78aa], and Sections 209(d), 

209(e), and 214(a) of the Advisers Act [15 U.S.C. §§ 80b-9(d), 80b-9(e), and 80b-

14(a)]. 

3. Defendant, directly or indirectly, has made use of the means or

instruments of transportation or communication in interstate commerce, or of a 

means or instrumentality of interstate commerce, or of the mails, in connection 

with the transactions, acts, practices, and courses of business alleged in this 

Complaint. Among other things, Defendant engaged in interstate emails and 

telephone calls with clients and Resolute personnel. 

4. Venue lies in this District pursuant to Section 22(a) of the Securities

Act [15 U.S.C. §77v (a)] and Section 27 of the Exchange Act [15 U.S.C. S78aa 

(a)] because Defendant transacted business here, including certain of the acts 

complained of in this Complaint, and because Defendant resided and maintained a 

principal place of business in Laguna Niguel, California during the Relevant 

Period. 

5. Defendant and the Commission executed tolling agreements that

tolled the running of any applicable statute of limitation from September 23, 2024 

to June 21, 2025. The Defendant’s securities law violations during the Relevant 

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 2 of 19   Page ID #:2



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

 

 - 3 -  

 

Period are within the five-year statute of limitations for certain relief as set forth in 

28 U.S.C. § 2462. 

SUMMARY 

6. From at least 2020 through 2021 (the “Relevant Period”), Richards, a 

California-based insurance agent, working through his entities KNR Wealth 

Management, Inc. (“KNR Wealth Management”) and KNR Consulting Group, 

Inc. (“KNR Consulting”), marketed and sold approximately $12 million of 

investments in risky, oil and gas securities (the “Oil and Gas Securities”) to 

approximately 25 retail investors. The Oil and Gas Securities were sold in a series 

of unregistered securities offerings sponsored by Resolute Capital Partners, LLC 

(“Resolute”) and Homebound Resources, LLC (“Homebound”). Resolute paid 

transaction-based compensation to Richards through an intermediary company, 

Beacon Global Group, Inc. (“Beacon Global”).  

7. Richards targeted his existing base of insurance clients to purchase 

Oil and Gas Securities.  Richards also used email solicitations, print 

advertisements, networking events, seminars, local news interviews, and a talk 

radio show to promote oil and gas investing.  When contacted by prospective 

investors, Richards often recommended that they invest in the Oil and Gas 

Securities.  

8. Many of the individuals to whom Richards sold the Oil and Gas 

Securities lost their money. The sponsoring entities failed to make interest 

payments and return principal to debt investors when notes came due and made 

only de minimis distributions to equity investors. 

9. Richards received $618,794 in transaction-based compensation from 

Resolute for sales of Oil and Gas Securities during the Relevant Period. 

10. During the Relevant Period, Richards acted as an investment adviser 

and would advise clients to invest in the Oil and Gas Securities. He advised clients 

to invest in the Oil and Gas Securities. Richards received advisory fees based on 

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 3 of 19   Page ID #:3



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

 

 - 4 -  

 

assets under management in exchange for providing investment advice via his 

entity KNR Wealth Management. Richards did not disclose to his advisory clients 

the additional transaction-based compensation he received for selling the Oil and 

Gas securities, which breached his fiduciary duty to his advisory clients. 

11. Richards violated the federal securities laws by: (i) actively 

participating in the offer and sale of the Oil and Gas Securities in securities 

offerings that were not registered with the Commission or exempt from 

registration; (ii) acting as a broker in the offer and sale of the Oil and Gas 

Securities while failing to be registered with the Commission as, or associate with, 

a registered broker-dealer; and (iii) failing to disclose to advisory clients his 

financial conflict of interest in connection with the sale of the Oil and Gas 

securities.  

12. Richards participated in unregistered offerings at key points in the 

chain of distribution of the Oil and Gas Securities, including by actively soliciting 

purchases from investors in this District and elsewhere in the United States. The 

Oil and Gas Securities offerings were not registered with the Commission or 

exempt from registration. 

13. Richards acted as an unregistered broker and engaged in the business 

of effecting transactions in securities for others. Defendant actively solicited his 

clients to purchase the Oil and Gas Securities and received transaction-based 

compensation in return.  

14. Richards also failed to disclose financial conflicts of interest while 

acting as an investment adviser. He recommended the Oil and Gas Securities to 

advisory clients, while failing to disclose to those clients the financial 

compensation he received from the sale of the securities.  

VIOLATIONS AND RELIEF SOUGHT 

15. As a result of conduct alleged in this Complaint, Defendant violated 

Sections 5(a) and 5(c) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. 

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 4 of 19   Page ID #:4



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

 

 - 5 -  

 

§§ 77e(a) and (c)], Section 15(a) of the Securities Exchange Act of 1934 

(“Exchange Act”) [15 U.S.C. § 78o(a)], and Section 206(2) of the Investment 

Advisers Act of 1940 (“Advisers Act”) [15 U.S.C. § 80b-6(2)].  

16. The Commission seeks a judgment from this Court: 

(a) permanently restraining and enjoining Defendant from future 

violations of Sections 5 of the Securities Act [15 U.S.C. §§ 

77e] and Section 15(a) of the Exchange Act [15 U.S.C. § 

78o(a)]; 

(b) permanently restraining and enjoining Defendant from 

violating, while acting as an investment adviser, Section 206(2) 

of the Advisers Act [15 U.S.C. § 80b-6(2)] by using the mails 

or any means or instrumentality of interstate commerce, 

directly or indirectly, to engage in any transaction, practice, or 

course of business which operates as a fraud or deceit upon any 

client or prospective client by, directly or indirectly, (i) creating 

a false appearance or otherwise deceiving any client or 

prospective client, or (ii) disseminating false or misleading 

documents, materials, or information or making, either orally 

or in writing, any false or misleading statement in any 

communication with any client or prospective client, about the 

use of client funds or compensation to any person, including 

any associated conflicts of interest; 

(c) permanently restraining and enjoining Defendant from, directly 

or indirectly, including but not limited to through any entity he 

owns or controls, participating in the issuance, purchase, offer, 

or sale of any security; provided, however, that such injunction 

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 5 of 19   Page ID #:5



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

 

 - 6 -  

 

shall not prevent Defendant Richards from purchasing or 

selling securities for his own personal account; 

(d) restraining and enjoining Defendant for five years from, 

directly or indirectly, acting as or being associated with any 

broker, dealer, or investment adviser; for purposes of this 

paragraph: (a) a person is associated with a broker or dealer if 

such person is a partner, officer, director, or branch manager of 

such broker or dealer (or occupies a similar status or performs 

similar functions), directly or indirectly controls, is controlled 

by, or is under common control with such broker or dealer, or 

is an employee of such broker or dealer; and (b) a person is 

associated with an investment adviser if such person is a 

partner, officer, or director of such investment adviser (or 

performs similar functions), or directly or indirectly controls or 

is controlled by such investment adviser, including any 

employee of such investment adviser; 

(e) ordering Defendant to disgorge his ill-gotten gains, together 

with prejudgment interest thereon pursuant to Section 21(d)(3), 

(d)(5), (d)(7) of the Exchange Act [15 U.S.C. § 78u(d)(3), (5), 

and (7)]; and 

(f) ordering Defendant to pay civil money penalties pursuant to 

Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)], 

Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)], and 

Section 209(e) of the Advisers Act [15 U.S.C. § 80b-9(e)].   

DEFENDANT 

17. Kevin Neal Richards, age 53, resides in Clearwater, Florida. 

Richards is a licensed insurance agent in California. During the Relevant Period, 

Richards lived and conducted business in Laguna Niguel, California. Richards is 

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 6 of 19   Page ID #:6



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

 

 - 7 -  

 

not registered with the Commission as a securities broker, but was previously 

associated with various registered brokers prior to the Relevant Period. During the 

Relevant Period, Richards was an investment adviser representative, and was 

associated with KNR Wealth Management, Inc., an investment adviser registered 

in Florida, California, and Texas. 

OTHER RELEVANT PERSONS AND ENTITIES 

18. KNR Consulting Group, Inc. was a California company located in 

Laguna Niguel, California. Richards was the sole owner and operator. The 

company is defunct.  

19. KNR Wealth Management, Inc. was a California company located 

in Laguna Niguel, California. The company was registered in California, Florida 

and Texas as an investment adviser until the status was terminated in 2024. The 

company is defunct.  

20. Beacon Global Group, Inc. is a Georgia company located in 

Marietta, Georgia. Beacon Global purports to offer consultancy services to 

businesses. 

21. Resolute Capital Partners LTD, LLC is a Nevada company with 

offices in Texas, California and Minnesota. Resolute created numerous oil and gas 

debt and equity investment vehicles using oil and gas wells identified by 

Homebound and its affiliates.  

22. Homebound Resources, LLC is a Texas company located in Irving, 

Texas. Homebound acted as a project sponsor for Resolute’s offerings and was 

responsible for identifying and purchasing the oil and gas wells in which the 

Resolute investment vehicles owned working interests.  

23. Thomas Joseph Powell (“Powell”), age 53, is a resident of Reno, 

Nevada. Powell was the owner of Resolute and other related entities, and served as 

the Senior Managing Partner of Resolute during the Relevant Period.  

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 7 of 19   Page ID #:7



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

 

 - 8 -  

 

24. Stefan Tiberiu Toth (“Toth”), age 48, is a resident of Frisco, Texas. 

Toth is the founder, co-owner, Chairman and Chief Executive Officer of 

Homebound Financial Group, LP, and also operated and controlled its 

subsidiaries, including Homebound, during the Relevant Period.  

25. A 2021 Commission Order found that Homebound, Resolute, Powell, 

and Toth violated registration and anti-fraud provisions of the federal securities 

laws. See In the Matter of Resolute Capital Partners, Ltd, LLC, et al., AP File No. 

3-20597 (Sept. 24, 2021) (the “Commission Order”). In particular, the 

Commission Order found that Homebound, Resolute, Powell, and Toth sold the 

Oil and Gas Securities in unregistered offerings that were not exempt from 

registration. It also found that their offering disclosures were inadequate and that 

they made materially misleading statements in marketing the Oil and Gas 

Securities. The misleading statements included insufficiently supported oil 

production projections, assertions about potential tax benefits that were 

unavailable to certain investors, and incomplete disclosures about potential uses of 

investor funds, including the amount of funds that would be used for payments to 

prior debt and equity investors. 

26. Each of Homebound, Resolute, Powell, and Toth reached a settlement 

with the Commission, neither admitting nor denying the Commission’s findings. 

The Commission Order found that Homebound, Resolute, Powell, and Toth 

violated Sections 5(a) and (c) and 17(a)(2) and (3) of the Securities Act, and found 

that Powell and Toth additionally violated Section 15(a) of the Exchange Act. 

FACTS 

I. The Unregistered Offerings of the Oil and Gas Securities 

27. The Oil and Gas Securities offered and sold by Resolute and 

Homebound included both equity securities and debt securities. The securities 

were offered and sold throughout the Relevant Period. 

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 8 of 19   Page ID #:8



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

 

 - 9 -  

 

28. The equity securities were membership interests in pooled investment 

vehicles that purchased a percentage interest in a set of oil and gas wells identified 

and purchased by Homebound including, for example, an offering titled Strategic 

Energy Assets VIII. The offering materials for these equity securities stated that 

investors could expect monetary distributions from revenue earned by the wells’ 

oil or gas production and revenue from any subsequent sale of the wells. 

29. The debt securities were promissory notes issued by subsidiaries of 

Homebound including, for example, offerings titled Choice Energy Holdings III 

and PRMH Lenders Fund IV The offering materials for these debt securities stated 

that the proceeds would be used by a subsidiary of Homebound to acquire oil and 

gas leases, among other things. The offering materials promised fixed interest 

payments ranging between 8% to 12% and the return of capital upon expiration of 

the notes. 

30. The Oil and Gas Securities were “Securities” within the meaning of 

Section 2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange Act. 

The equity securities involved investors paying money to purchase membership 

interests, a common enterprise, and a reasonable expectation of profits based on 

the efforts of third parties who identified, acquired and drilled the wells. The 

promissory notes were “notes” as included in the definition of “security” set forth 

in Section 2(a)(1) of the Securities Act. 

31. The offerings of Oil and Gas Securities were required to be registered 

with the Commission under Sections 5(a) and (c) of the Securities Act or 

otherwise qualify for an exemption from registration. During the Relevant Period, 

no registration statement was filed or in effect for any offering of Oil and Gas 

Securities and no exemption from registration applied to these securities offerings. 

 

 

 

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 9 of 19   Page ID #:9



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

 

 - 10 -  

 

II. Richards Contracted with Beacon Global to be a “Referral Agent” for 

Resolute 

32. On October 12, 2018, Beacon Global entered into a “Master Services 

Agreement” with Resolute. The agreement obligated Beacon Global to provide 

“support and compliance services” to Resolute. This included Beacon Global 

contracting with “Referral Agents” who would “refer” investors to Resolute for 

potential investment in the Oil and Gas Securities. Beacon Global was also 

required to provide “payment services” to Resolute by receiving a monthly ACH 

transfer from Resolute and using the funds to compensate the “Referral Agents.” 

The agreement stated that Beacon Global was to receive compensation, on a 

monthly basis, of the greater of (a) $20,000 or (b) 0.4% of monies brought in by 

the “Referral Agents.” The agreement also provided for reimbursement of Beacon 

Global’s expenses. 

33. On October 24, 2018, Richards entered into an agreement with 

Beacon Global to act as a “Referral Agent” (or “Referral Contractor,” as the 

agreement states) for Resolute. The “Referral Contractor Agreement” provided 

Beacon Global would compensate Richards for “referring” investors to Resolute 

for investment in the Oil and Gas Securities. It specified that Richards would be 

paid both a monthly fee and additional transaction-based compensation for his 

efforts. On October 21, 2020, Richards entered into a new “Referral Contractor 

Agreement,” which updated the terms of Richards’s compensation, but similarly 

provided that Beacon Global would compensate Richards for his “referral” of 

investors to Resolute.  

34. The agreements prohibited Richards, as a “Referral Contractor,” from 

engaging in certain activities. Among other things, Richards was not permitted to: 

a. “Provide to prospective investors or lenders (‘Prospects’) any 

offering documents related to investment opportunities”; 

b. “Sell any securities or engage in any sales efforts”; 

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 10 of 19   Page ID #:10



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

 

 - 11 -  

 

c. “‘Pre-sell’ securities offered by [Resolute] in order to gauge a 

Prospect’s interest in an investment”; 

d. “Solicit any Prospect for investment”; 

e. “Make any recommendation with respect to a potential 

investment”; 

f. “Give any advice or express any opinion with respect to a potential 

investment, or its advantages or disadvantages”; 

g. “Conduct any suitability analysis, conduct any due diligence, 

provide any valuation services, or provide any analysis of a 

potential investment”;  

h. “Do any advertising or mass marketing”;  

i. “Modify existing or create new educational materials”; and 

j. “Compensate another person, entity, or other third party based on a 

referral’s investment into any product.” 

As described below, Richards engaged in sales activities despite the foregoing 

prohibitions in the agreements. 

III. Richards’s Sales Activity Relating to the Oil and Gas Securities 

35. Although the “Referral Contractor Agreements” purported to limit his 

services to finding and referring potential investors to Resolute, Defendant in fact 

participated in the offer and sale of the Oil and Gas Securities to investors.  

36. Defendant sought prospective investors through general solicitation in 

a variety of ways. Richards promoted oil and gas investing at networking events, 

seminars, local news interviews, and on a radio show; used advertising spots in 

Forbes and other media, and email solicitations to reach a large audience and 

solicit additional investors. Richards told prospective investors that if they were 

interested in oil and gas investing, they should contact him directly for additional 

information.  

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 11 of 19   Page ID #:11



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

 

 - 12 -  

 

37. When prospective investors reached out to Richards, they were 

invited to meet with him. There, prospective investors were given questionnaires 

to assess their wealth and risk tolerance.  

38. Richards described the Oil and Gas Securities in detail to his clients. 

He provided investors with marketing and offering documents for the securities, 

which he then reviewed with them, and discussed with clients the features and 

risks of the investments.  

39. Richards filled out investment documents on behalf of investorsand 

would have them sign. 

40. Richards made presentations to prospective investors using charts 

with projections, and told investors that the Oil and Gas Securities were low risk, 

high return investments. Richards told investors that there were many layers of 

professionals overseeing the investments which ensured that the investments were 

sound. Richards advised investors on the purported tax benefits of investing in the 

Oil and Gas Securities. 

41. Richards told investors that Thomas Powell was the largest investor 

in the Oil and Gas Securities, reiterating a false statement made by Powell at 

investment seminars. 

42. As to certain investors, Richards also was an investment adviser 

through his defunct entity, KNR Wealth Management, and advised investors to 

invest in the Oil and Gas Securities. Richards, through KNR Wealth Management, 

received fees from these advisory clients for providing investment advice and 

managing the clients’ investments. Richards did not disclose to these clients who 

purchased the Oil and Gas Securities the financial compensation he received from 

Resolute/Beacon, which was a breach of fiduciary duty to his advisory clients. The 

failure to disclose this compensation was material. Following his recommendation, 

certain of Richards’s clients purchased the Oil and Gas Securities.    

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 12 of 19   Page ID #:12



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

 

 - 13 -  

 

43. Richards affirmatively made misrepresentations about his 

compensation.  For example, in or around March 2020, an advisory client, Investor 

A, repeatedly questioned Richards regarding how he was compensated for selling 

the Oil and Gas Securities. Richards told Investor A that he (Richards) received a 

discount when buying Oil and Gas Securities for himself.  Richards did not tell 

Investor A that he received transaction-based compensation for his clients’ 

investments in the Oil and Gas Securities. Richards also incorrectly told this same 

investor that the Oil and Gas securities was insured and that there was no risk. In 

this and the example described directly below, Richards relayed information to 

investors that he received from Resolute which turned out to be false or 

misleading.  Investor A ultimately lost $250,000 from his investments in Resolute.  

44. In or around April 2020, Richards incorrectly told other advisory 

clients, Investors B and C, a married couple, that their principal was “guaranteed” 

because it was secured by Resolute’s real estate assets. In fact, Resolute’s 

liabilities vastly exceeded its assets.   

45. Investor D, another advisory client of Richards, received investment 

advice and, based on Richards’s recommendation, invested $250,000 in the Oil 

and Gas Securities in February 2020.  Again, Richards did not disclose his 

transaction-based compensation to Investor D.  Investor D received three months 

of interest payments before payments stopped, and lost the vast majority of her 

principal.   

46. Through Richards, investors purchased investments in multiple of the 

Oil and Gas Securities offerings, including offerings titled Strategic Energy Assets 

VIII, Choice Energy Holdings III, and PRMH Lenders Fund IV. 

47. Richards’s contribution to the distribution of the Oil and Gas 

Securities was not de minimis. To the contrary, he generated approximately $12 

million of sales for Resolute during the Relevant Period.  

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 13 of 19   Page ID #:13



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

 

 - 14 -  

 

IV. Richards’s Compensation 

48. During the Relevant Period, Richards sold approximately $12 million 

of the Oil and Gas Securities to retail investors, and received from Resolute, 

through Beacon Global, $618,794 in transaction-based compensation. This 

compensation was purportedly calculated based on the two “Referral Contractor 

Agreements” between Richards and Beacon Global. 

49. The first agreement, the October 2018 “Referral Contractor 

Agreement” between Richards and Beacon Global, provided that Richards would 

receive a monthly contractor fee of $29,151.57, as well as a referral fee of $2,309 

for every investor Richards placed with Resolute. The agreement also provided 

that Richards’s compensation could increase pursuant to bi-weekly “quality 

assessments” of Richards’s “referrals” and certain “referral fee multipliers.” The 

“quality assessments” allowed Beacon Global and Resolute to adjust Richards’s 

compensation based on how much investment money he was bringing into 

Resolute. The “referral fee multipliers” provided for additional compensation to 

Richards for longer term debt securities that he sold. For example, Richards was 

compensated more for selling a two-year note than a one-year note.  

50. The second agreement, the July 2020 “Referral Contractor 

Agreement,” provided for tier-based “referral” fees, with “Directors Club” being 

the highest paid tier. The agreement also had “quality assessment” provisions and 

provided that “[a]dditional Marketing Fees may be provided at the sole discretion 

of the parties.” Under both agreements, Resolute, through Beacon Global, paid to 

Richards transaction-based compensation based on the dollar amount of 

investments and type of securities Richards sold. The tier designations provided 

for higher compensation to Richards based on the aggregate amount of money 

Richard’s clients invested in the Oil and Gas Securities.  

51. Richards was paid for performance and monies invested—

transaction-based compensation—through the use of salesperson “tiers,” “referral 

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 14 of 19   Page ID #:14



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

 

 - 15 -  

 

fee multipliers” and “quality assessments.” Richards received $368,293.69 in 

transaction-based compensation in 2020, and $250,500 in 2021.  

  

CLAIMS FOR RELIEF 

Count I 

(Violations of Sections 5(a) and 5(c) of the Securities Act) 

52. The Commission re-alleges and incorporates by reference the 

allegations in paragraphs 1 through 52, inclusive, as if they were fully set forth 

herein. 

53. As detailed above, Richards, by engaging in the securities offerings 

alleged in this Complaint directly or indirectly: 

(a) made use of the means or instruments of transportation or 

communications in interstate commerce or of the mails to sell 

securities through the use or medium of any prospectus or 

otherwise, without a registration statement in effect as to such 

securities;  

(b) carried or caused to be carried through the mails or in interstate 

commerce, by any means or instruments of transportation, 

securities for the purpose of sale or for delivery after sale, 

without a registration statement in effect as to such securities; 

and  

(c) made use of the means or instruments of transportation or 

communication in interstate commerce or of the mails to offer 

to sell through the use or medium of a prospectus or otherwise, 

securities as to which no registration statement had been filed. 

54. There were no applicable exemptions from registration for the 

offerings Richards engaged in as described herein.  

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 15 of 19   Page ID #:15



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

 

 - 16 -  

 

55. By reason of the foregoing, Defendant violated, and, unless enjoined, 

is reasonably likely to continue to violate, Sections 5(a) and 5(c) of the Securities 

Act, 15 U.S.C. § 77e(a) and 77e(c). 

Count II 

(Violations of Section 15(a) of the Exchange Act) 

56. The Commission re-alleges and incorporates by reference the 

allegations in paragraphs 1 through 52 inclusive, as if they were fully set forth 

herein. 

57. As detailed above, Defendant, directly or indirectly, by the use of the 

mails or the means or instrumentalities of interstate commerce, while acting as a 

broker or dealer, effected transactions in the purchase or sale of securities, while 

Richards was not registered with the Commission as a broker or dealer in 

accordance with Section 15(b) of the Exchange Act [15 U.S.C. § 78o(b)]. 

58. By engaging in the conduct described above, Defendant violated, and 

unless restrained and enjoined, is reasonably likely to continue to violate, Section 

15(a) of the Exchange Act, 15 U.S.C. § 78o(a). 

Count III 

(Violations of Section 206(2) of the Advisers Act) 

59. The Commission re-alleges and incorporates by reference the 

allegations in paragraphs 1 through 52 inclusive, as if they were fully set forth 

herein. 

60. By engaging in the acts and conduct alleged in this Complaint, 

Defendant acted as an investment adviser to his clients within the meaning of 

Section 202(a)(11) of the Advisers Act, 15 U.S.C. § 80b-2(a)(11), because, for 

compensation, he engaged in the business of advising others, either directly or 

through publications or writings, as to the value of securities or as to the 

advisability of investing in, purchasing, or selling securities. 

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 16 of 19   Page ID #:16



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

 

 - 17 -  

 

61. As detailed above, defendant, directly or indirectly, by use of the 

mails or means or instrumentalities of interstate commerce, while acting as 

investment advisers, engaged in transactions, practices, or courses of business 

which operated as a fraud or deceit upon any client or prospective client, with at 

least negligence. 

62. As an investment adviser, Defendant owed his clients a fiduciary duty 

of utmost good faith, undivided loyalty, and care to make full disclosure to them of 

all material facts, as well as the duty to act in their best interests, and not to act in 

his own interests to the detriment of his clients. 

63. Defendant breached his fiduciary duty to clients and engaged in 

fraudulent conduct by not disclosing conflicts of interest to his clients.  

64. By reason of the foregoing, Defendant violated, and unless enjoined 

is reasonably likely to continue to violate, Section 206(2) of the Advisers Act, 15 

U.S.C. § 80b-6(2). 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that the Court enter 

a judgment: 

(A) Permanently restraining and enjoining Defendant from, directly or 

indirectly, violating Section 5 of the Securities Act [15 U.S.C. § 77e]; and Section 

15(a) of the Exchange Act [15 U.S.C. § 78(o)];  

(B) Permanently restraining and enjoining Defendant from violating, 

while acting as an investment adviser, Section 206(2) of the Advisers Act [15 

U.S.C. § 80b-6(2)] by using the mails or any means or instrumentality of interstate 

commerce, directly or indirectly, to engage in any transaction, practice, or course 

of business which operates as a fraud or deceit upon any client or prospective 

client by, directly or indirectly, (i) creating a false appearance or otherwise 

deceiving any client or prospective client, or (ii) disseminating false or misleading 

documents, materials, or information or making, either orally or in writing, any 

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 17 of 19   Page ID #:17



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

 

 - 18 -  

 

false or misleading statement in any communication with any client or prospective 

client, about the use of client funds or compensation to any person, including any 

associated conflicts of interest; 

(C) Permanently restraining and enjoining Defendant from, directly or 

indirectly, including but not limited to through any entity he owns or controls: 

participating in the issuance, purchase, offer, or sale of any security; 

provided, however, that such injunction shall not prevent him from 

purchasing or selling securities for his own personal account; 

(D) Restraining and enjoining Defendant for five years from, directly or 

indirectly, acting as or being associated with any broker, dealer, or investment 

adviser; for purposes of this paragraph: (a) a person is associated with a broker or 

dealer if such person is a partner, officer, director, or branch manager of such 

broker or dealer (or occupies a similar status or performs similar functions), 

directly or indirectly controls, is controlled by, or is under common control with 

such broker or dealer, or is an employee of such broker or dealer; and (b) a person 

is associated with an investment adviser if such person is a partner, officer, or 

director of such investment adviser (or performs similar functions), or directly or 

indirectly controls or is controlled by such investment adviser, including any 

employee of such investment adviser; 

(E) Ordering Defendant to disgorge all funds received from his illegal 

conduct, together with prejudgment interest thereon, pursuant to Section 21(d)(3), 

(d)(5), (d)(7) of the Exchange Act [15 U.S.C. § 78u(d)(3), (5), and (7)]; 

(F) Ordering Defendant to pay a civil penalty pursuant to Section 20(d) of 

the Securities Act [15 U.S.C. § 77t(d)], Section 21(d) of the Exchange Act 

[15 U.S.C. § 78u(d)], and Section 209(e) of the Advisers Act [15 U.S.C. § 80b-

9(e)]; and 

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 18 of 19   Page ID #:18



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

 

 

 - 19 -  

 

(G) Granting such other and further relief as this Court may deem just, 

equitable, or necessary in connection with the enforcement of the federal 

securities laws and for the protection of investors. 

 
Date: September 11, 2025     

 
Respectfully submitted, 

            /s/ Ruth C. Pinkel 
Local Counsel 

   Securities and Exchange Commission 
444 S. Flower Street, Suite 900 
Los Angeles, CA 90071 
Telephone: (323) 965-3322 
Email: [email protected] 
 
Brian T. Fitzsimons (pro hac vice pending) 

 Securities and Exchange Commission 
 100 F Street NE 
 Washington, D.C. 20549 

Telephone: (202) 551-5905 
 Email: [email protected] 
 
 Attorneys for Plaintiff 
 
Of Counsel 
Brian O. Quinn 
David T. Frisof 
 
 

Case 8:25-cv-02057     Document 1     Filed 09/11/25     Page 19 of 19   Page ID #:19