Securities and Exchange Commission v. Petro-Suisse Ltd. and Mark Gasarch, 12-CV-6221 (S.D.N.Y.). On August 14, 2012, the SEC charged Mark Gasarch and Petro-Suisse Ltd. with offering fraud. The case concerns limited partnership offerings that Defendants promoted in order to finance the drilling of oil wells and generate investment returns for investors. Petro-Suisse solicited investments in limited partnerships offerings (“PetroSuisse Offerings”) using private placement memoranda (“Petro-Suisse PPMs”). Petro-Suisse raised about $8,370,000 from the Petro-Suisse Offerings. According to the Petro-Suisse PPMs, the limited partnerships were to obtain contracts with Petro-Suisse or an affiliated entity granting the limited partnerships the right to receive a return measured by the net revenues of the wells drilled, which was to be payable out of those revenues. The contractual rights to the returns provided the only source of revenue to the partnerships and their investors. Over a three-year period, neither Petro-Suisse nor its affiliates ever executed a single contract. Although investors received payments for some period of time, those payments stopped in 2007.
Without admitting or denying the allegations in the complaint, Petro-Suisse consented to the entry of a judgment enjoining it from future violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Gasarch consented to the entry of a judgment enjoining him from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Gasarch and Petro-Suisse are also jointly and severally liable to pay $8,370,000 in disgorgement which was deemed satisfied by the previous payments made by Petro-Suisse to the limited partnership investors, and for Gasarch to pay a $130,000 civil penalty.