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SEC Files Complaint Against Matthew C. Griffin and William D. Griffin Over Alleged Misrepresentations Concerning Payson Petroleum Offerings

Posted: November 3rd, 2017

Our attorneys are investigating Matthew C. Griffin and William D. Griffin after the SEC alleged the Griffins made misrepresentations concerning Bartonville, Texas-based Payson Petroluem, Inc. offerings.

The SEC Files a Complaint Against Matthew and William Griffin

In November 2016, the SEC filed a complaint against the Griffins, who are brothers. According to the complaint, Matthew Griffin was the founder, sole owner, president, and CEO of Payson Petroleum, Inc. His brother, William Griffin, was Payson Petroleum’s Chief Administrative Officer and a member of the board of directors.

According to the complaint, Matthew Griffin incorporated Payson Petroleum in 2008. He then created Payson Operating, LLC in 2010 with Payson Petroleum as the sole member. The next year, Texas would license Payson Operating as an oil and gas operator. Shortly after, Payson Petroleum and Payson Operating began their oil and gas operations, all of which were conducted in Grayson County, Texas, and investment solicitations.

SEC Allegations Concerning Payson Petroleum’s 3 Well Program

From 2011 to 2013, Payson Petroleum raised funds to complete three different wells. Following the completion of these wells, Matthew Griffin and Payson Petroleum launched the 3 Well Program.

The Griffins orchestrated a two-phase offering of units in two limited partnership issues to raise approximately $23 million in funds for the 3 Well Program. They commenced the first phase in October 2013, according to the SEC, and closed it in December 2013. The second phase was commenced shortly after in January 2014 then closed in June 2014. The units were offered by SEC- and FINRA-registered brokers and brokerage firms, including but not limited to PTX Securities.

According to the SEC, the Griffins reviewed and authorized the offering materials for the Payson Petroleum 3 Well Program, and these materials contained numerous misrepresentations and misleading omissions. Among other misrepresentations, misleading statements and omissions are the following, according to the SEC complaint:

  • Misrepresenting that Payson Petroleum would contribute 20% of the offering amount, or $5.4 million, and that this capital infusion would cover 20% of the drilling and completion cost of the wells;
  • Failing to disclose that Payson Petroleum lacked the financial means to make the $5.4 million;
  • Misrepresenting that Payson Petroleum had raised the projected $27 million the company told investors was necessary to pay for the 3 Well Program.

The Griffins, according to the SEC, did not contribute any funds towards the wells and lacked the financial means to do so.  In June 2010, Payson Petroleum and Payson Operating filed for Chapter 7 bankruptcy protection.  The bankruptcy trustee projects that neither company will have the funds available to pay its unsecured creditors.

Matthew Griffin and William Griffin

William D. Griffin (CRD# 4208630), in addition to his roles with Payson Petroleum and Payson Operating, was a former registered FINRA member. According to his CRD report, he was employed by Lone Star Securities from 2000 to 2001.  He was then employed by Red Rock Energy Partners from 2001 to 2015. Finally, he was briefly employed by D.H. Hill Securities in 2016.

Though not registered or formerly registered with FINRA, the Payson Petroleum websites states that Matthew Griffin held positions with Lone Star Securities and Red Rock Energy as well.

Contact Our Firm if You’ve Invested with Payson Petroleum, Payson Operating, or Their 3 Well Program

If you have invested in any of Payson Petroleum/Payson Operating’s private placements, including the 3 Well Program, contact our securities attorneys for a free consultation.  Our lawyers are experienced in recovering investor losses due to broker and brokerage firm misconduct, including losses incurred on risky private placements.

Silver Law Group represents the interests of investors who have been the victims of investment fraud.  If you have questions about your legal rights, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or toll free at (800) 975-4345.

 

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