SEC v. Leon Ali Parvizian; Arcturus Corporation; Aschere Energy LLC; Alfredo Gonzalez; AMG Energy, LLC; Robert Balunas, et al., No. LR-22891, Northern District of Texas (Dec. 16, 2013) — Press Release
raw: Arcturus Corporation, et al.
Arcturus Corporation, et al., No. 3:13-cv-04861 (Dec. 16, 2013)
Leon Ali Parvizian and his companies, Arcturus Corporation and Aschere Energy LLC, are accused of securities fraud for raising nearly $22 million from 380 investors through the sale of interests in oi
Leon Ali Parvizian and his companies, Arcturus Corporation and Aschere Energy LLC, are accused of securities fraud for raising nearly $22 million from 380 investors through the sale of interests in oil and gas joint ventures. The alleged fraud involved material misrepresentations and omissions, and the misuse of offering proceeds to pay for unrelated expenses, including legal fees, with only $7.9 million spent on drilling oil and gas wells. Parvizian, along with other defendants, are charged with violating sections of the Securities Act and Exchange Act, including unregistered securities offerings and acting as unregistered broker-dealers. The outcome is pending, with the SEC seeking permanent injunctions, disgorgement of ill-gotten gains, and civil penalties.
Leon Ali Parvizian and his companies, Arcturus Corporation and Aschere Energy LLC, are accused of securities fraud for raising nearly $22 million from 380 investors through the sale of interests in oil and gas joint ventures. The alleged fraud involved material misrepresentations and omissions, and the misuse of offering proceeds to pay for unrelated expenses, including legal fees, with only $7.9 million spent on drilling oil and gas wells. Parvizian, along with other defendants, are charged with violating sections of the Securities Act and Exchange Act, including unregistered securities offerings and acting as unregistered broker-dealers. The outcome is pending, with the SEC seeking permanent injunctions, disgorgement of ill-gotten gains, and civil penalties. The U.S. Securities and Exchange Commission charged Leon Ali Parvizian, his companies Arcturus Corporation and Aschere Energy LLC, and several promoters—including Alfredo Gonzalez, Robert Balunas, and their firms—with securities fraud and unregistered broker-dealer activity. Between 2007 and 2011, Parvizian raised nearly $22 million from over 380 investors through fraudulent oil and gas joint venture offerings, misrepresenting litigation risks and diverting 64% of funds—$14.1 million—to cover legal costs and personal expenses rather than drilling operations. Only $7.9 million (36%) was used for actual well development, and all offerings were unregistered and non-exempt. The defendants also acted as unregistered broker-dealers, receiving commissions based on funds raised. The SEC seeks permanent injunctions, disgorgement of ill-gotten gains with interest, and civil penalties against all defendants. The U.S. Securities and Exchange Commission charged Leon Ali Parvizian, his companies Arcturus Corporation and Aschere Energy LLC, and several promoters—including Alfredo Gonzalez, Robert Balunas, and their firms—with securities fraud and unregistered broker-dealer activity. Between 2007 and 2011, Parvizian raised nearly $22 million from over 380 investors through fraudulent oil and gas joint venture offerings, misrepresenting material litigation and diverting 64% of funds—$14.1 million—for legal fees and personal expenses rather than drilling operations. Only $7.9 million (36%) was used for actual well development, while defendants failed to register the securities or disclose critical risks. The promoters received unregistered, commission-based compensation for soliciting investors, violating broker-dealer registration rules. The SEC seeks permanent injunctions, disgorgement of ill-gotten gains with interest, and civil penalties against all defendants.
Exhibits & Attached Documents (1)
Extracted insights
- $22.00M $22 million $10M–$100M
- $7.90M $7.9 million $1M–$10M
- agency Securities and Exchange Commission
- organization Securities and Exchange Commission
- Securities and Exchange Commission charged Leon Ali Parvizian and his two companies, Arcturus Corporation and Aschere Energy LLC, with the fraudulent offer and sale of securities in the form of interests in oil and gas joint ventures
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 22891 / December 16, 2013 Securities and Exchange Commission v. Arcturus Corporation, et al., Civil Action No. Civ. Action No. 3:13-cv-04861-K (N.D. Tex., Dallas Division, filed December 12, 2013) SEC Charges Texas Oil and Gas Promoters for Securities Fraud On December 12, 2013, the Securities and Exchange Commission charged Leon Ali Parvizian and his two companies, Arcturus Corporation and Aschere Energy LLC, with the fraudulent offer and sale of securities in the form of interests in oil and gas joint ventures. The Commission also charged promoters Alfredo Gonzalez, AMG Energy, LLC , Robert Balunas, and R. Thomas & Co., LLC with violations of the securities offering and broker-dealer registration provisions of the federal securities laws. Filed in the United States District Court for the Northern District of Texas, the Commission's complaint alleges that the Parvizian, through Arcturus and Aschere, raised nearly $22 million from at least 380 investors between 2007 and December 2011.The complaint alleges that Parvizian prepared and disseminated to prospective investors offering materials that included material misrepresentations and omissions regarding, among other things, material litigation involving Arcturus and Aschere. According to the complaint, Parvizian, Arcturus and Aschere systematically, and without disclosure to investors, used the offering proceeds to pay the costs of defending and settling the litigation. The complaint further alleges that, among other things, Parvizian prematurely called for completion funds on at least two projects before he had finished drilling and testing the wells because he had already spent the offering proceeds for non-JV related expenses, including legal fees. According to the complaint, Parvizian, Arcturus, and Aschere spent only $7.9 million, or 36 percent, of the money raised to drill oil and gas wells. The complaint also alleges that the defendants offered and sold the joint venture interests in unregistered securities offerings that were not exempt from the registration requirements of the federal securities laws. In addition, the complaint alleges that Parvizian, Gonzalez, AMG, Balunas, and R. Thomas & Co. acted as unregistered broker-dealers. According to the complaint, Parvizian, Gonzalez, Balunas, AMG Energy, and R. Thomas received transaction-based compensation in the form of sales commissions based upon a percentage of the amount of investor funds raised. The complaint alleges that Parvizian, Arcturus, and Aschere violated Sections 5(a) and 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act")and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rule 10b-5 thereunder and that Parvizian also violated Section 15(a) of the Exchange Act. Gonzalez, AMG, Balunas, and R. Thomas are charged with violating Section 5(a) and 5(c) of the Securities Act and with Section 15(a) of the Exchange Act. The Commission is seeking permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties against each of the defendants. The SEC's investigation was conducted by Ronda Blair, Ty Martinez, and Barbara Gunn of SEC's Fort Worth Regional Office. The SEC acknowledges the assistance of the Financial Industry Regulatory Authority and the Texas State Securities Board. SEC ComplaintU.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 22891 / December 16, 2013 Securities and Exchange Commission v. Arcturus Corporation, et al., Civil Action No. Civ. Action No. 3:13-cv-04861-K (N.D. Tex., Dallas Division, filed December 12, 2013) SEC Charges Texas Oil and Gas Promoters for Securities Fraud On December 12, 2013, the Securities and Exchange Commission charged Leon Ali Parvizian and his two companies, Arcturus Corporation and Aschere Energy LLC, with the fraudulent offer and sale of securities in the form of interests in oil and gas joint ventures. The Commission also charged promoters Alfredo Gonzalez, AMG Energy, LLC , Robert Balunas, and R. Thomas & Co., LLC with violations of the securities offering and broker-dealer registration provisions of the federal securities laws. Filed in the United States District Court for the Northern District of Texas, the Commission's complaint alleges that the Parvizian, through Arcturus and Aschere, raised nearly $22 million from at least 380 investors between 2007 and December 2011.The complaint alleges that Parvizian prepared and disseminated to prospective investors offering materials that included material misrepresentations and omissions regarding, among other things, material litigation involving Arcturus and Aschere. According to the complaint, Parvizian, Arcturus and Aschere systematically, and without disclosure to investors, used the offering proceeds to pay the costs of defending and settling the litigation. The complaint further alleges that, among other things, Parvizian prematurely called for completion funds on at least two projects before he had finished drilling and testing the wells because he had already spent the offering proceeds for non-JV related expenses, including legal fees. According to the complaint, Parvizian, Arcturus, and Aschere spent only $7.9 million, or 36 percent, of the money raised to drill oil and gas wells. The complaint also alleges that the defendants offered and sold the joint venture interests in unregistered securities offerings that were not exempt from the registration requirements of the federal securities laws. In addition, the complaint alleges that Parvizian, Gonzalez, AMG, Balunas, and R. Thomas & Co. acted as unregistered broker-dealers. According to the complaint, Parvizian, Gonzalez, Balunas, AMG Energy, and R. Thomas received transaction-based compensation in the form of sales commissions based upon a percentage of the amount of investor funds raised. The complaint alleges that Parvizian, Arcturus, and Aschere violated Sections 5(a) and 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act")and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rule 10b-5 thereunder and that Parvizian also violated Section 15(a) of the Exchange Act. Gonzalez, AMG, Balunas, and R. Thomas are charged with violating Section 5(a) and 5(c) of the Securities Act and with Section 15(a) of the Exchange Act. The Commission is seeking permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties against each of the defendants. The SEC's investigation was conducted by Ronda Blair, Ty Martinez, and Barbara Gunn of SEC's Fort Worth Regional Office. The SEC acknowledges the assistance of the Financial Industry Regulatory Authority and the Texas State Securities Board. SEC Complaint