A Texas oil and gas company has been given a cease and desist order for allegedly violating securities registration and licensing provisions of the Colorado Securities Act in connection with the offer of securities in and from Colorado.
The Mieka Corp., of Dallas, its managing director, Daro Blankenship, and Stephen Romo, one of Mieka’s sales agents, were named in the order.
Commissioner Fred Joseph issued the final order for violating the registration and licensing provisions of the Colorado Securities Act. The matter was heard before the Colorado Securities Board at a show-cause hearing. The Colorado Securities Board, in its initial decision, recommended that the cease and desist order be issued.
At the hearing, the board found that Romo cold-called a division employee and offered the employee a joint venture interest in an oil and gas prospect being promoted by Mieka, which involved drilling two oil wells in Westmoreland, Pa. Mieka was selling 25 “units” in the project for $158,400 for each unit.
The staff alleged in its claim that Romo represented that this investment would be producing oil for 30 to 40 years, that the wells drilled in this area have a 97 percent success rate, and that all partners can expect to receive a 12 percent to 18 percent return on their investment. The staff alleged that Romo represented that the drilling risk was very nil since he had not heard of any misses.
Even though the joint venture was set up by Mieka as a general partnership under Texas law, the board determined that the joint venture interests offered were, in fact, securities under Colorado law. Because the board found that the interests were securities, it also found that Respondents violated the registration and licensing provisions of the act by failing to register the securities with the commissioner, and by failing to have its salesman properly licensed by the commissioner to sell securities in Colorado.
The securities commission ordered all three to immediately cease and desist offering or selling any security in or from the state of Colorado in violation of the anti-fraud, registration and licensing provisions of the Act or otherwise engaging in conduct in violation of state law.
“From the standpoint of investor protection in Colorado, this is a very important decision by the Securities Board,” said Commissioner Joseph. “With the high price of oil, investors in Colorado continue to be regularly solicited by oil and gas promoters, touting these so-called joint venture interests. These oil and gas promoters are now on notice that Colorado investors are entitled to the protections of our Act of full disclosure and regulatory oversight. We intend to ensure Colorado investors are afforded these protections.”