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OFFICE OF SECURITIES
121 STATE HOUSE STATION
AUGUSTA, ME 04333
NOTICE OF INTENT TO ISSUE CEASE AND DESIST
NOTICE OF INTENT
CEASE AND DESIST ORDER
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.
MOGI, on its website located at www.mcog.org (“the
website”), described a number of its current oil and gas projects in
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.”
In or about October 2002, an investor from
10. By e-mail
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
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
15. By another letter
16. Upon receipt
of these two letters, 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
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.
Units in MOGI have never been registered under the Act for
offer and sale in
Respondents violated 32 M.R.S.A. § 10401 by
offering and selling
unregistered securities in
Cease and Desist against Respondents MOGI and White for securities law violations similar to those alleged herein. On March 7, 2003, the State of Texas issued an Emergency Cease and Desist Order against Respondents MOGI, White and two other individuals affiliated with Respondents, also for securities law violations similar to those alleged herein.
29. Pursuant to 32 M.R.S.A. § 10602(1)(A), the Administrator may, after notice and opportunity for hearing, issue a cease and desist order against any person if the Administrator reasonably believes that the person has engaged, is engaging, or is about to engage in any act or practice constituting a violation of any provision of the Act or any rule or Order issued pursuant to the Act.
Pursuant to 32 M.R.S.A. § 10708(6), notice is hereby given that the Administrator intends to issue an Order to Cease and Desist against all Respondents to prohibit further violations of the Revised Maine Securities Act.
Pursuant to 32 M.R.S.A. § 10708(2), Respondents have thirty (30) calendar days from the entry of this Notice of Intent to file a written request for a hearing.
Date: January 29, 2004 /s/ Christine A. Bruenn
Christine A. Bruenn
Date: January 29, 2004 /s/ Bonnie E. Russell
Bonnie E. Russell
Assistant Securities Administrator
Date: January 29, 2004 /s/ Christian D. Van Dyck
Christian D. Van Dyck