The Colorado Court of Appeals upheld a cease-and-desist order issued by the Securities Commission against a Texas oil and gas company and its principal, Daro Blankenship.
The company was ordered to stop selling securities in a joint venture to develop an oil and gas project in Pennsylvania to residents of Colorado. In the order, issued April 8, 2011, the commissioner also found that Mieka violated the registration and licensing provisions of the Colorado Securities Act in offering these interests in the state.
On appeal, Mieka argued that the joint venture interests in the oil-and-gas project were not securities, and that the Colorado Securities Act did not apply to these transactions. The Court of Appeals rejected those arguments and affirmed the findings of the Commissioner that these types of joint venture interests are indeed securities.
“We believe that this is an important judicial decision for investor protection in Colorado,” said Securities Commissioner Fred Joseph. “Investments offering profit participation in oil and gas ventures can be legitimate for those who understand and can afford the risk. But too often we are seeing questionable energy deals aggressively promoted to the public. This decision extends the protection of the securities laws to these types of transactions. As in any investment, we ask that investors investigate before they invest and call our office,”