Thomas Powell, owner and managing partner of Resolute Capital Partners (RCP), a Nevada company that also has offices in California, Minnesota, and Texas, and Stefan Toth, who managed Homebound Resources, LLC (HR), a Texas company founded in 2014, and a subsidiary of Homebound Financial Group (HFG), have agreed to the cease-and-desist order issued by the Securities Exchange Commission (SEC).
The SEC order also restrains them for two years from participating in any unregistered oil and gas offering, mandates that the restraining order be posted on all their websites for a period of three years and that they engage an independent consultant for three years for ensuring compliance.
Toth and Powell also consented to bars of collateral and penny stock, as well as investment company prohibitions. After two years have passed, they will have the right to re-enter.
RCP and HR have, separately, agreed to pay $225K each as a civil penalty, with Toth and Powell coughing up $75K each, also as a civil penalty.
The case against Resolute Capital Partners (RCP)
RCP and HR, along with Toth and Powell, were charged with omissions and material misrepresentations by the SEC in over a dozen unregistered securities offerings of oil and gas. Acting as unregistered brokers was the other charge levied on the two individuals.
Based on working interest in oil and gas wells, the respondents, and salespeople representing them, solicited equity and debt investments from retail investors. They were found guilty of making omissions and misrepresentations that were material, in both the equity as well as debt offerings. The period of these transgressions was held to be between 2016 and 2019.
Overstating cash reserves, providing future production estimates that were not supported by data, overlooking the non-availability of certain tax benefits to some of the investors and inadequate disclosure about how the investor funds would be deployed, including the fact that the money would be used for paying off earlier debt, were some of the more specific charges against them. The order goes on the state that the respondents should have had adequate knowledge that their omissions and misrepresentations would tantamount to materially misleading the recipients of the information.
Enforcement Division Associate Director Carolyn M. Welshhans, said: “Today’s settlements provide important protections for investors, including prohibiting the respondents from participating in any oil and gas offerings for two years and requiring an independent compliance consultant to review policies, procedures, and offering materials for any further offerings for three years. Investors are entitled to materially accurate disclosures so they can make informed investment decisions.”
The respondents were held to be in violation of the antifraud provisions and the registration provisions of the Securities Act of 1933. Powell and Toth were also found guilty of acting as unregistered brokers.
Legal support for investors
The Financial Industry Regulatory Authority (FINRA), makes available an arbitration process for impacted investors to raise claims. Investors losing money in this case are advised to do the same. It is also recommended that the arbitration be filed with the help of an experienced securities lawyer.
At Haselkorn & Thibaut, P. A., we work on a contingency basis for every one of our clients. You owe us nothing unless we obtain a recovery on your behalf. We fund the expenses till recovery is made. Interested investors can reach us on 1-800-856-3352.