Back in 2015 during the earliest days of securities crowdfunding in the US, the first case of alleged fraud surfaced by an issuer using Reg D 506c.
Ascenergy, a purported Oil & Gas company, along with CEO Joey Gabaldon and several relief defendants were the target of a Securities and Exchange Commission (SEC) emergency action.
According to the filing at that time,:
“Ascenergy has been soliciting investors on crowdfunding websites and its own website to purchase overriding royalty interests in undeveloped oil and gas wells. Ascenergy’s disclosures contain multiple, material misrepresentations about the company and the nature of the offering. In summary, Ascenergy falsely holds itself out as a credible energy company, and it presents the investment as a novel and extremely low-risk opportunity that will essentially guarantee investors out-sized returns. In reality, Ascenergy is, at best, offering a high-risk investment in undeveloped and unproven conventional oil and gas wells.”
The SEC reported that approximately $5 million had been raised via several crowdfunding platforms with 90 investors participating in the offering. At the time of the emergency action to freeze assets, the SEC stated that $1.2 million had already been spent. Unfortunately, only $1200 appeared to have been spent on “oil & gas related expenses.” The rest, according to the SEC, was spent on things like foreign travel, restaurants, and trips to the Apple Store.
Ascenergy, Joey Gabaldon (and relief defendant Alanah Energy) were effectively barred from the securities industry with the Defendant neither admitting nor denying the allegations in the SEC complaint. The judgment also required the Defendants to pay disgorgement of ill-gotten gains along with prejudgment interest and a civil penalty.
In 2017, defendants Gabaldon and Ascenergy were said to be liable for disgorgement of $5,112,473, representing profits gained as a result of the conduct alleged in the Complaint. There was also prejudgment interest in the amount of $197,217. The complete settlement is viewable here.
This week, apparently, Gabaldon has resurfaced once again.
The cat, unfortunately, died.
Gabaldon was arrested and taken to Mission Hospital Laguna Beach and then taken to jail. The same report stated that Gabaldon was booked on suspicion of animal cruelty, resisting an executive officer and resisting arrest. Bail was set at $20,000.