April 18, 2017 Comments (0) Securities Fraud

Dakota Plains Holdings Investment Losses

Dakota Plains Holdings
(Last Updated On: April 18, 2017)

Update on Dakota Plains Holdings

Have you suffered investment losses in Dakota Plains Holdings, Inc? If so, The White Law Group may be able to help you recover your losses by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.

Dakota Plains Holdings, Inc. is an integrated midstream energy company operating the Pioneer Terminal with services that include outbound crude oil storage, logistics, and rail transportation and inbound frac sand logistics, according to their website. Dakota Plains was founded in 2008 and is headquartered in Wayzata, Minnesota.

The company filed for Chapter 11 bankruptcy on December 20 and plans to sell substantially all of its assets to a Houston-based company for $8.55 million, according to Minneapolis Star Tribune.

Dakota Plains, which loads oil into rail cars in North Dakota, has been losing money fast and stock has been trading at less than 1 cent. Six of Dakota Plains’ subsidiaries filed Chapter 11 Tuesday along with their parent company in U.S. Bankruptcy Court for the District of Minnesota.

Dakota Plains went public in March 2012 and its shares quickly hit $12. By October of that year, though, they had fallen below $5 and dwindled to around $2 by early 2015 before virtually disappearing.

Update on SEC Charges

Co-founders — Ryan Gilbertson and Michael Reger — have been targets of a federal securities investigation surrounding the company’s initial public offering and various loans made to them in the company’s early history. In November, the Securities and Exchange Commission accused Gilbertson of multiple violations of securities laws, claims which Gilbertson denied. In addition, the SEC announced that Reger had settled separate claims against him and agreed to pay $8 million, without admitting or denying guilt.

On March 22, 2017, Ryan Gilbertson, was indicted on 13 counts of wire fraud. Also charged in the indictment were Douglas Hoskins and Nick Shermeta.

According to the SEC’s complaint Gilbertson and Reger installed their fathers as figurehead executives in order to secretly wield control of the company and issue millions of shares of stock to themselves, family, and friends. They allegedly later hired one of their friends as CEO. They allegedly caused the company to enter into an agreement to borrow money from them under generous terms that included extra bonus payments to Gilbertson, and other lenders based on the price of Dakota Plains stock after 20 days of trading following a reverse merger into a company with publicly-traded shares.

According to the SEC’s complaint, Gilbertson enlisted friends and associates including Douglas Hoskins to choreograph extensive sales and purchases of Dakota Plains stock and cause the price to skyrocket from 30 cents to more than $12 per share during that 20-day period. The allegedly inflated stock price obligated Dakota Plains to make bonus payments totaling $32,851,800 to Gilbertson and others. After allegedly meeting his target to receive the bonus payments, Gilbertson ceased his alleged manipulation efforts. The stock price then allegedly steadily declined to pennies per share and the company was eventually delisted.

Recovery of Investment Losses

Broker dealers are required to perform adequate due diligence on all investment recommendations to ensure that each investment is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.

If a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be liable for investment losses.

To determine whether you may be able to recover investment losses incurred as a result of your purchase of Dakota Plains Holdings or another oil and gas investment, please contact The White Law Group at 1-888-637-5510 for a free consultation.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida. For more information on the firm, visit www.WhiteSecuritiesLaw.com.