TAG | Professional Investment Exchange Inc.
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The United States Securities and Exchange Commission(SEC) filed a civil action against California-resident Paul N. Nicholson, and his former firm, Professional Investment Exchange, Inc. (“PIE”), on April 7, 2011, alleging that they directed two fraudulent oil-and-gas offerings. According to the complaint, from May 2007 through October 2009, Nicholson and PIE fraudulently raised approximately $8.2 million from investors through two limited partnerships, Energy Opportunity Fund — VI, LLLP and Energy Opportunity Fund — VII, LLLP.
The SEC article goes on to say that the Commission’s complaint alleges, in particular, that Nicholson, who formerly operated broker-dealer Macarthur Strategies, Inc. (“Macarthur”), and PIE, an entity Nicholson controlled, misused and misappropriated investor funds, including, among other things, using investor funds to pay undisclosed commissions to unlicensed salespeople, to pay Macarthur’s expenses and to pay undisclosed personal salary and expenses. The complaint also alleges that in communications with potential and existing investors, Nicholson engaged in conduct that operated as a fraud and deceit on investors, including by omitting material information about the use of investor proceeds and about the past performance of Nicholson’s and PIE’s oil-and-gas ventures. The complaint further alleges that Nicholson sold unregistered securities and that he operated PIE as an unregistered broker-dealer. In early 2010, Nicholson transferred control of PIE to new management and deregistered Macarthur.
We learn through the SEC article that without admitting or denying the allegations in the Commission’s complaint, and subject to court approval, Nicholson and PIE have consented to the entry of judgments that would enjoin them from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. Nicholson has also agreed to pay disgorgement of $234,081 with prejudgment interest of $10,722. The Commission will ask the Court to impose a civil money penalty against Nicholson. Nicholson has also agreed to entry of a Commission order barring him from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, or from participating in an offering of penny stock.
This article is from the SEC’s website.
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