SEC v. Commodore Financial Corp.; Christopher Schlegel; M&G Cap Services; and Andres Calvo, No. LR-23376, Central District of California (Oct. 1, 2015) — Press Release
raw: Commodore Financial Corp., et al.
Commodore Financial Corp., et al., No. LR-23376 (Oct. 1, 2015)
Commodore Financial Corp., CEO Christopher Schlegel, and Arizona boiler room operator Andres Calvo defrauded at least 84 investors of $7.5 million through a scheme involving the sale of fractional interests in oil and gas wells, and face SEC charges and penalties.
Commodore Financial Corp., its CEO Christopher Schlegel, and Arizona-based boiler room operator Andres Calvo allegedly defrauded at least 84 investors of approximately $7.5 million through a scheme involving the sale of fractional interests in oil and gas wells. The defendants misappropriated almost half of investor funds for exorbitant commissions and personal use, including private jet charters and Las Vegas casino expenses. The SEC seeks permanent injunctions, civil penalties, disgorgement, and other relief against the defendants.
The U.S. Securities and Exchange Commission charged Commodore Financial Corp., its CEO Christopher Schlegel, and Arizona-based boiler room operator Andres Calvo with defrauding at least 84 investors of approximately $7.5 million through fraudulent sales of fractional oil and gas interests. The defendants falsely claimed that 80–90% of investor funds would finance legitimate oil and gas operations and that Commodore was an experienced, Texas-based company with a profitable track record—claims that were entirely false, as the company had no real Texas presence or industry expertise. Nearly half the funds were misappropriated to pay exorbitant commissions to Calvo’s operation and for Schlegel’s personal expenses, including private jets and casino gambling, while only about half went toward actual operations. The SEC alleged violations of Sections 5, 17(a), and 10(b) of the federal securities laws, as well as Section 15(a) for operating as unregistered broker-dealers. The defendants also falsely represented to existing investors that Commodore was almost finished preparing checks to pay returns on their current investment in order to solicit investments for a new project, when in reality the current investment had not yet generated any revenue. The SEC seeks permanent injunctions, civil penalties, disgorgement, and other relief against the defendants.
Extracted insights
- $7.50M $7.5 million $1M–$10M
- agency Securities and Exchange Commission
- organization Securities and Exchange Commission
- Securities and Exchange Commission charged Commodore Financial Corporation, its CEO Christophe, and an Arizona-based boiler room operator with defrauding investors
- Securities and Exchange Commission charged Commodore Financial Corporation, its CEO Christophe, and an Arizona-based boiler room operator with defrauding investors
- SEC announced fraud charges against Commodore Financial Corporation
- SEC alleges Commodore Financial Corporation defrauded investors
- Commodore Financial Corporation defrauding investors
- SEC charged CEO Christophe
- SEC charged Arizona boiler room operator
- Commodore Financial Corp. filed against Civil Action No. 15-CV-01567
- SEC filed Litigation Release No. 23376
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 23376 / October 1, 2015 Securities and Exchange Commission v. Commodore Financial Corp., et al., Civil Action No. 15-CV-01567 (C.D. Cal., filed September 30, 2015) SEC Charges Orange County Oil and Gas Company, CEO, and Arizona Boiler Room Operator with Defrauding Investors The Securities and Exchange Commission today announced fraud charges against an Orange County, Calif. oil and gas company, its CEO, and an Arizona-based boiler room operator. The SEC alleges Commodore Financial Corporation, CEO Christopher Schlegel, M&G Cap Services, and Andres Calvo raised approximately $7.5 million from at least 84 investors through their fraudulent offer and sale of fractional interests in oil and gas wells. According to the SEC's complaint, filed on September 30, 2015 in the U.S. District Court for the Central District of California, Commodore and Schlegel engaged in a scheme to defraud investors by misappropriating almost half of investor funds to pay exorbitant commissions to Calvo and his boiler room operation as well as for Schlegel's own personal use, which included private jet charters and Las Vegas casino expenses. The complaint alleges Commodore and Schlegel compounded their fraud by falsely telling investors that the vast majority of their moneyâ"80% to 90%â"would be used to fund oil and gas operations, and that Commodore was an experienced, Texas-based oil and gas company with a proven track record of profitability. The complaint further alleges that only about half of investor funds went toward oil and gas operations. In addition, the complaint alleges that Commodore had no real Texas presence, and neither Commodore nor Schlegel had any actual oil and gas experience, let alone a proven track record of profitability. Further, Commodore and Schlegel allegedly falsely represented to existing investors that Commodore was almost finished preparing checks to pay returns on their current investment in order to solicit investments for a new project. According the complaint, however, the current investment had not yet generated any revenue. M&G and Calvo also lied about the exorbitant commissions they actually received. The Commission alleges that defendants violated Section 5 of the Securities Act of 1933 and the antifraud provisions of the securities laws in Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act. Finally, the complaint alleges that M&G and Calvo violated Section 15(a) of the Exchange Act by acting as unregistered broker-dealers. The SEC's complaint seeks permanent injunctions, civil penalties, disgorgement plus prejudgment interest, and other relief against all of the defendants.U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 23376 / October 1, 2015 Securities and Exchange Commission v. Commodore Financial Corp., et al., Civil Action No. 15-CV-01567 (C.D. Cal., filed September 30, 2015) SEC Charges Orange County Oil and Gas Company, CEO, and Arizona Boiler Room Operator with Defrauding Investors The Securities and Exchange Commission today announced fraud charges against an Orange County, Calif. oil and gas company, its CEO, and an Arizona-based boiler room operator. The SEC alleges Commodore Financial Corporation, CEO Christopher Schlegel, M&G Cap Services, and Andres Calvo raised approximately $7.5 million from at least 84 investors through their fraudulent offer and sale of fractional interests in oil and gas wells. According to the SEC's complaint, filed on September 30, 2015 in the U.S. District Court for the Central District of California, Commodore and Schlegel engaged in a scheme to defraud investors by misappropriating almost half of investor funds to pay exorbitant commissions to Calvo and his boiler room operation as well as for Schlegel's own personal use, which included private jet charters and Las Vegas casino expenses. The complaint alleges Commodore and Schlegel compounded their fraud by falsely telling investors that the vast majority of their moneyâ"80% to 90%â"would be used to fund oil and gas operations, and that Commodore was an experienced, Texas-based oil and gas company with a proven track record of profitability. The complaint further alleges that only about half of investor funds went toward oil and gas operations. In addition, the complaint alleges that Commodore had no real Texas presence, and neither Commodore nor Schlegel had any actual oil and gas experience, let alone a proven track record of profitability. Further, Commodore and Schlegel allegedly falsely represented to existing investors that Commodore was almost finished preparing checks to pay returns on their current investment in order to solicit investments for a new project. According the complaint, however, the current investment had not yet generated any revenue. M&G and Calvo also lied about the exorbitant commissions they actually received. The Commission alleges that defendants violated Section 5 of the Securities Act of 1933 and the antifraud provisions of the securities laws in Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act. Finally, the complaint alleges that M&G and Calvo violated Section 15(a) of the Exchange Act by acting as unregistered broker-dealers. The SEC's complaint seeks permanent injunctions, civil penalties, disgorgement plus prejudgment interest, and other relief against all of the defendants.