$17 Million from Cold Calls, SEC Says

DALLAS (CN) – A Dallas-area securities recidivist defrauded hundreds of people of $17.3 million through cold calls for supposed oil and gas investments, the SEC claims in court.
     The SEC sued Bret L. Boteler, 48, of Bedford, between Dallas and Fort Worth.
     “Boteler consented in 1998 to an injunction against registration and anti-fraud violations of the federal securities laws,” the SEC says in its federal complaint.
     The new complaint concerns his company EnerMax, though Boteler is the only defendant. He founded it in 2001, in Hurst, Texas, and was its president and only shareholder. It’s no longer in business.
     “Between November 2007 and December 2011, Boteler, directly and indirectly, by
     and through EnerMax, Inc. (‘EnerMax’), raised $17.26 million through the fraudulent offer and sale of securities to some 260 investors in more than 40 states without registering any offering,” the SEC says in the complaint. “The offers and sales occurred in the course of a nationwide general solicitation to hundreds of prospective investors, directed by Boteler and accomplished through EnerMax’s website and
     interstate telephone ‘cold calls’ by EnerMax’s sales force. The securities, in the form of investment contracts, represented interests in what were essentially 16 limited partnerships styled as ‘joint ventures.’ The ventures were formed to drill nine oil-and-gas wells and operate one salt water disposal well in Yoakum County and Runnels County, Texas. Few if any of the venture investors had experience with oil-and-gas exploration or operations. They lacked any relationship with each other or with EnerMax. They had no meaningful access to information necessary to govern the ventures’ affairs. And, they had no meaningful power or ability to control venture operations. Instead, Boteler, as the president of EnerMax, which was the managing venturer for the 16 ventures, controlled the operations of each venture and the flow of information relevant to their operations. EnerMax’s website and its offering materials, all under Boteler’s control, falsely portrayed EnerMax as an innovative, technologically sophisticated company offering high quality prospects, and misrepresented and omitted material information regarding the speculative, unproven nature of the prospects. The offering materials also falsely stated that EnerMax would not comingle proceeds and that EnerMax officers would not receive
     commissions from the sale of interests in the ventures. The offering materials omitted material information regarding EnerMax’s financial obligations and its ability to meet such obligations, and its misapplication of the offering proceeds, including for Boteler’s personal benefit. EnerMax has now ceased operations and ended its management of the joint ventures, without investors realizing any significant return of their investment.”
     The SEC seeks disgorgement, penalties and an injunction.

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