by TSSB staff
Texas Securities Commissioner Travis J. Iles on Feb. 9 entered an Emergency Cease and Desist Order against two Dallas men who are soliciting $4.4 million for an oil and gas project without disclosing their history of unpaid tax liens and allegations of fraud.
The order names Jason A. Gilbert and Parker R. Hallam, who are doing business through SourceRock Energy Phoenix Prospect LP and two affiliated companies. The companies are based in Dallas.
According to the order, Gilbert and Hallam are offering for sale interests in a single well project in Sumner County, Kansas. Of the $4.4 million the pair say they plan to raise, $1 million is supposed to be paid to one of their companies, SourceRock Energy Partners LP, as a management fee.
Gilbert and Hallam are telling investors that the remaining $3.4 million will be spent to lease the land in Kansas and develop the well field. They are not, however, disclosing that the estimated drilling costs are far lower – $750,000.
Hallam is also not disclosing that the Securities and Exchange Commission in 2016 named him as one of a dozen defendants in a lawsuit alleging oil and gas fraud of $80 million.
Hallam consented to an SEC judgment in the case in the U.S. District Court for the Northern District of Texas on April 18, 2017. Hallam agreed to pay disgorgement of gains and a civil penalty to be determined by the SEC.
Gilbert is not disclosing $548,041 in tax liens the IRS filed against him from 2009 to 2017. The IRS filed liens against Hallam in 2016 and 2017, which have an unpaid balance of $142,672.
As of Jan. 10, the liens had not been released.
Intentionally failing to disclose material information about an investment or persons offering the investment violates the anti-fraud provisions of the Texas Securities Act.
Gilbert and Hallam are not registered to sell securities. Neither are the SourceRock energy companies.