October 18, 2011 Comments (0) Blog, Securities Fraud

Recovery of Striker Petroleum LLC Debenture Offering Investment Losses

(Last Updated On: July 17, 2015)

Have you suffered losses due to your investment in Striker Petroleum, LLC? The White Law Group may be able to help you recover your investment losses.

Our firm is currently investigating Striker Petroleum’s Debenture offerings on behalf of damaged investors. We are looking into how the offerings were sold and what representations were made about the investments.

According to the SEC, “On December 3, 2009, [they] obtained by consent permanent injunctions against Striker Petroleum, LLC and its principals, Mark S. Roberts and Christopher E. Pippin, and a freeze of Striker’s assets, in connection with the fraudulent sale of debentures collateralized through oil and gas properties.”

The allegations raised by the SEC contend that “…from September 2006 through September 2008, Striker illegally raised approximately $57 million from about 540 investors nationwide from the sale of the debentures.” Striker is said to have made misrepresentations to investors including, “…material misrepresentations and omissions concerning Striker’s earnings and asset valuations, use of investor proceeds and the existence of a third party independent trustee for the debenture collateral.”

According to SEC documents in 2005 through the middle of 2006 Striker raised capital through 3 “Legacy offerings.” These offerings were sold “through a nationwide network of registered broker dealers utilizing Private Placement Memorandums (“PPMs”) and brochures created by Striker.” Returns on these investments would eventually fall off and Striker looked “for ways to increase the Legacy returns.” They decided to offer guaranteed returns of 12% to the Legacy investors instead on relying on the performance of their properties production and most investors accepted these terms. The SEC states that in order to meet the 12% “it had to rely on funds raised through the debenture offerings to sustain the fixed return payments.”

These debenture offerings are the major source of the SEC’s issues with Striker Petroleum. The SEC says that, “In mid-2006, at the suggestion of a registered representative of one of the brokers involved in the Legacy offerings, Roberts and Pippin decided to raise capital by offering debentures that would be collateralized by oil and gas properties.” They raised these funds through a series of offerings from 2006 until late 2007 during which they raised the aforementioned “illegally raised” $57 million.

These debenture offerings were sold through some of the same brokerage firms that had offered the Legacy investments. Investors were provided “…a detailed PPM containing descriptions of the offering, the company’s business plan and associated risks.” However, as previously stated these materials allegedly contained a series of misrepresentations and omissions.

First, the monies raised from the debenture offerings were allegedly not used in the way they were described in Striker’s private placement documents. Secondly, the SEC contends that financials provided to investors contained some information that was “mischaracterized and/or materially overvalued.” Finally, the SEC alleged that while Striker stated that they would appoint an “independent third party trustee” “to hold legal title to the collateral for the benefit of the debenture holders” they in fact appointed their general counsel to hold the titles which the SEC believes may have amounted to a misrepresentation and conflict of interest.

Brokerage firms have a fiduciary duty to perform due diligence on any investment and to insure that an investment is appropriate in light of the investor’s age, investment experience, and investment objectives. If a brokerage firm recommended you invest in a Striker Petroleum offering you may have grounds for a FINRA claim to recover your losses.

If you have suffered losses from your investments in Striker Petroleum, LLC offerings and would like to speak to a securities attorney about your ability to recover your investment please call our Chicago office at 312-238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

-->