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STATE OF
OFFICE OF SECURITIES
121 STATE HOUSE STATION
AUGUSTA, ME 04333
CEASE AND DESIST
ORDER 04-025
FINDINGS OF
FACT AND CONCLUSIONS OF LAW
Pursuant
to 32 M.R.S.A. §§ 10602 and
10708, the Securities Administrator finds and orders as follows:
1.
Mid-Continent Oil and Gas, Inc. (“MOGI”) is a
2.
Steven Lee White (“White”) is an individual who at all relevant
times has been President of MOGI and has the same last known business address
as MOGI.
3.
Casey Ladymon (“Ladymon”) is an individual who at all relevant times was a
Director and Senior Advisor of MOGI, and solicited monies from individuals to invest
in MOGI’s purported oil and gas exploration projects.
4.
Chad Willis (“Willis”) is an individual who at all relevant
times was a Director and Senior Advisor
of MOGI, and solicited individuals to invest in MOGI’s
purported oil and gas exploration projects.
5.
MOGI, on its website located at www.mcog.org (“the
website”), described a number of its current oil and gas projects in
6.
MOGI also represented on the website that it was working on
the Barnett Shale project located in
7.
MOGI further represented on the website that, “[t]he Barnett
Shale would be a conservative investment for any oil and gas investor. Investing into the Barnett Shale, an investor
should expect to see a monthly income, take advantage of phenomenal tax benefits,
all with limited risk in losing their principal investment.”
8.
Furthermore, MOGI represented on the website that it “handle[s]
oil and gas investments in low risk oil and gas fields. Every investment opportunity chosen is a
geologically proven oil producing region.
Our goal is to build our investor base by lowering tax burdens and
creating a monthly income, without trying to put investors at risk of losing
their principal by going for the home run.”
9.
In or about October 2002, an investor from
10. By e-mail
dated
The well is
called the Beard Prospect. The acreage
is surrounded by Devon Energy and Chief Oil & Gas. You probably know who
11. Following this
e-mail from Ladymon, the
12. By e-mail
dated
Mid-Continent
is trying really hard to get rid of 6.5% of our committed 19% on the Elder
Prospect. With three projects going on
it is quite a bit on our plate to raise 66% of the Smith (which is closed) and
22 % of the Beard (which is closed). Due
to the tremendous activity it has left us a bit short on the Elder. We really would like to raise the funds for
the 6.5% by the 21st of March.
Mid-Continent only intended to keep 4% of this project, and right now we
have 10.5%.
If anyone is
interest [sic] in buying a half percent on a prospect that is low cost and
averages a 20-30% rate of return plus tax benefits, to do us a favor please let
me know.
13. Following this
e-mail from Ladymon, the Maine investor sent MOGI a $4,000.00
check dated March 28, 2003, for the purchase of a half unit in the Elder
Prospect.
14. By letter
dated
15. By another letter
dated
16. Upon receipt
of these two letters, the
17. The
18. On or about
19. In attempting
to sort out the
20. In or about
August 2003, White also told the
21. The total monies
invested by the
22. Since August
2003, the Maine Widow has not received any monies or any further communications
from Respondents.
23. By certified
letter dated
24. By certified letter dated
25. Pursuant to 32
M.R.S.A. §10401, a person may not offer or
sell any security in Maine unless the
security is registered under the Revised Maine Securities Act (“the Act”) or
the securities or transaction is exempt from registration under the Act.
26.
Units in MOGI have never been registered under the Act for
offer and sale in
27.
Respondents violated 32 M.R.S.A. § 10401 by
offering and selling
unregistered securities in
28.
On
Cease and Desist against Respondents MOGI
and White for securities law
violations similar to those alleged herein. On
29.
On
FINAL
ORDER
NOW, THEREFORE, it is ORDERED that MOGI and White immediately CEASE AND DESIST from violating any provisions of the Revised Maine Securities Act, including § 10401 which prohibits a person from offering or selling any security in Maine unless the security is registered under the Act or the securities or transactions are exempt from registration under the Act.
Pursuant to 32 M.R.S.A §10708, this is a final order, entered after notice an opportunity for hearing. Pursuant to 32 M.R.S.A. §10709, a party may obtain judicial review of the order in Kennebec County Superior Court by filing a petition within thirty (30) calendar days after receipt of the order, in accordance with 5 M.R.S.A. §11001 et seq. and Rule 80C of the Maine Rules of Civil Procedure.
Date:
Christine A. Bruenn
Securities Administrator
Reviewed by:
Date:
Bonnie E. Russell
Assistant Securities Administrator
Presented by:
Date:
Christian D. Van Dyck
Investigator/Examiner