Download: Energy Investment Advisory

WASHINGTON, D.C. (June 18, 2013) – With energy demands and a desire for energy independence increasing globally, investments in traditional and alternative energy resources are being promoted more often and are becoming attractive to investors and con artists alike, the North American Securities Administrators Association (NASAA) said today.

In an investor advisory, NASAA explains the most common ways energy investment products may be offered, why investors need to be cautious and how investors can protect themselves when considering investments in traditional or alternative energy offerings. NASAA’s energy investments advisory is available here.

“Many of these investments are highly risky and illiquid and therefore are not appropriate for many investors,” said Heath Abshure, NASAA President and Arkansas Securities Commissioner. “It is not unusual for unscrupulous promoters to use the lure of current events or innovative technologies to take advantage of unsuspecting investors by engaging in fraudulent practices.”

Abshure said promoters sometimes prey on investors interested in socially responsible products by labeling them as “green energy” investment opportunities. The phrase “green energy” implies that the products are ecologically friendly. In some cases, the promoters may be operating a fraudulent shell company and not producing anything.

In NASAA’s most recent enforcement survey, oil and gas investments were the fourth most common product at the heart of state securities enforcement cases, with about 40 percent of responding jurisdictions reporting energy-related enforcement cases. Recent energy-related cases include:

  • In May 2013, the Texas State Securities Board announced the sentencing of a Texas man to 25 years in state prison for stealing money from two elderly women who had been told they could earn annual returns of at least 15 percent from oil and gas projects in North Dakota. The projects did not exist.
  • In May 2013, based on a referral from the Missouri Securities Division, federal prosecutors obtained the convictions of five people involved in sham energy company that proved to be a get-rich-quick scheme that cost thousands of investors more than $10 million.
  • In March 2013, the Ohio Division of Securities reported the sentencing of an Ohio man to 5 years in prison after he pled guilty to 44 counts, including securities fraud, grand theft, theft from the elderly, and the sale of unregistered securities involving the sale of approximately $162,000 in unregistered securities, including oil futures. Investors were told that their investments were safe, secure and that there was no way they could lose their money.

For more information about the risks associated with energy investments, contact your state or provincial securities regulator. Contact information is available on the NASAA website here.

For More Information:
Bob Webster | Director of Communications
202-737-0900

 NASAA –





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