|Securities and Exchange Commission v. Norstra Energy Inc., Glen Landry and Eric Dany, Civil Action No. 15-cv-4751 (S.D.N.Y.) |
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 23290 / June 18, 2015 Securities and Exchange Commission v. Norstra Energy Inc., Glen Landry and Eric Dany, Civil Action No. 15-cv-4751 (S.D.N.Y.) SEC Charges Microcap Oil Company CEO and Stock Promoter with Defrauding Investors The Securities and Exchange Commission today charged a Texas-based oil company and its CEO with defrauding investors about reserve estimates and drilling plans, and charged the author of a stock-picking newsletter for his role in a fraudulent promotional campaign encouraging readers to buy the oil company's penny stock shares.
The SEC alleges that shortly after becoming Norstra Energy's CEO in March 2013, Glen Landry began making false and misleading claims about business prospects on Norstra's website as well as in press releases and SEC filings. Landry and Norstra Energy misled investors about the location of the company's property in order to make the wells appear more promising and twice disclosed an inaccurate date to begin drilling operations to make the potential for oil riches appear imminent.
The SEC's complaint filed in federal court in Manhattan alleges that promotional materials issued by Eric Dany falsely proclaimed that "Norstra Energy could be sitting on top of as much as 8.5 billion barrels of oil!" and said the planned wells had a 99 percent chance of profitability. After the exaggerated statements about its property and prospects caused Norstra Energy's stock price to increase nearly 600 percent in a three-month period, the SEC suspended trading in June 2013.
The SEC's complaint charges Norstra Energy, Landry, and Dany with fraud and seeks final judgments ordering permanent injunctions, return of allegedly ill-gotten gains with interest, and financial penalties. The SEC also seeks to bar Landry from serving as an officer or director of a public company or participating in a penny stock offering. For further information, please see Press Release Number 2015-126 (June 18, 2015).