SEC fines ‘unscrupulous promoter’ $510,000

A Colorado oil executive and two gas companies he operated have agreed to pay $510,000 in restitution to settle civil fraud allegations levied against them by the Securities and Exchange Commission. The SEC accused Donald H. Allen and his companies, Colorado Springs, Colo.-based H&M Petroleum Corp. and American Energy Resources Corp., of raising around $9.9 million from 350 investors between 2002 and 2006 without disclosing that no profits had been generated. Mr. Allen allegedly spent $2.3 million of investor funds to pay for personal items like ski vacations, fitness equipment and jewelry. He and his companies solicited investors through telephone calls and “seminars” advertised in local newspapers. “This enforcement action reflects the commission's unwavering commitment to pursue and punish unscrupulous promoters who choose not to make full disclosure to their investors,” George B. Curtis, deputy director of the SEC's Division of Enforcement, said in a statement. The settlement by Mr. Allen and his companies does not admit or deny the SEC allegations.