SEC takes action against Irving company for misleading investors in oil and gas securities

Two Texas-affiliated companies and their owners will face civil fines totaling $ 600,000 after the Securities and Exchange Commission charged them with misleading investors on more than a dozen unregistered oil and gas security offers totaling more than 250 Sued million dollars.

Stefan Toth, president and co-founder of Irving-based HomeBound Resources LLC, and Thomas Powell, founder of Nevada-based Resolute Capital Partners LTD LLC, agreed to settle the mandate without admitting or denying the results of the SEC, the regulator said on Friday with SEC said they both also acted as unregistered brokers.

Homebound Resources and Resolute Capital each agreed to pay a fine of $ 225,000, while Toth and Powell will each pay $ 75,000, according to the SEC. Neither Toth nor Powell could be reached for comment.

“Today’s comparisons offer investors important protections, including banning respondents from participating in oil and gas deals for two years and requiring an independent compliance advisor to review policies, procedures and offer materials for additional offers for three years,” said SEC Enforcement Division Associate Director Carolyn Welshhans.

Homebound Resources, a subsidiary of HomeBound Financial Group LP, is the project sponsor for Resolute Capital, a private equity firm with offices in Texas. Homebound Resources was responsible for identifying and purchasing oil and gas wells in which Resolute Capital was involved.

From 2016 to 2019, the companies and sellers acting on their behalf sold debt and equity securities based on stakes in oil and gas wells. According to the SEC lawsuit, the companies presented inadequately supported projections of future oil production, inflated cash reserves and provided incomplete information on the use of investor funds.

Toth and Powell approved unilateral documents for potential investors with inaccurate forecasts for oil production, the lawsuit said. In a bid, Resolute Capital reportedly forecast 510 barrels of oil a day. After nearly two years of production, wells in this offering averaged just 40 barrels per day, according to the SEC.

The legal filing also states that Toth and Powell approved bond offers alleging that the debtors would loan funds to PetroRock, HomeBound Resources’ sister company, who would then acquire oil and gas leases, fund their operations, and make interest payments would pay debts on others. Investors were not notified that a large part of the assets would be used to pay investors in other debt securities.

The SEC’s investigation involved the Nevada Securities Division, the Securities Division of the Washington State Department of Financial Institutions, and the Financial Industry Regulatory Authority.

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