Maryland Attorney General Orders Oil and Gas Company and President to Cease and Desist for Violating Securities Laws

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Maryland Attorney General orders oil, gas company & president to stop selling unregistered securities. Fined $900K for ignoring prior ban.

Maryland Attorney General Anthony G. Brown announced that the state’s Securities Division has issued Final Orders against North Texas Energy, Inc. (NTE), an oil and gas company based in Texas, and its founder and president, Kevin LaMonte Jones. These orders mandate that NTE and Jones cease and desist from further violations of Maryland’s securities laws, including the registration and anti-fraud provisions of the Maryland Securities Act. This action follows a previous order issued in March 2023, which barred them from engaging in the securities and investment advisory business within Maryland. The new orders also impose a significant civil penalty of $900,000 against both the company and Jones.

The initial investigation by the Securities Division in March 2023 found that NTE and Jones had offered and sold unregistered equity shares in NTE to Maryland investors without disclosing crucial information. During this period, they raised approximately 2 million from these investors. The prior order prohibited them from offering and selling unregistered securities in Maryland, barred them from the securities and investment advisory business, and levied a civil penalty of 1.85 million. Despite this previous ruling, the Securities Division discovered that NTE and Jones deliberately ignored the March 2023 order. They continued to offer and sell unregistered NTE shares to Maryland investors, accumulating at least an additional $350,000. Furthermore, NTE and Jones allegedly misled potential investors by falsely claiming their securities offerings were exempt from Maryland’s securities laws and the previous order that prohibited their involvement in such activities. Adding to their legal troubles, NTE was also the subject of a judgment in Oklahoma County District Court, which enjoined the company from offering or selling securities within or from Oklahoma.

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This latest action by the Maryland Attorney General’s office serves as a reminder to Maryland residents about the importance of due diligence before investing their money. The Attorney General’s office emphasizes that transparency and honesty are paramount when companies seek investment from the public. Individuals who are considering an investment are encouraged to contact the Securities Division directly to verify the registration status of their investment adviser, broker, and the securities themselves. Even if an investment opportunity appears sound and is recommended by trusted individuals, it is always advisable to take a few moments to confirm the legitimacy of the investment and the promoters. The Securities Division can be reached at 410-576-6360.