SEC v. Joseph Hilton, et al.. On October 3, 2012, the SEC announced it obtained an emergency order freezing the assets of Joseph Hilton who has been charged with fraud. In 2010, the SEC obtained a final judgment against Joseph Yurkin enjoining him from future violations of the anti-fraud and registration provisions of the federal securities laws. Yurkin changed his name to Hilton so that future investors would not lean of his past fraud. Hilton has been selling limited partnership interests in oil drilling projects by United States Energy Corporation. Hilton misled investors about his identity, the risks of the investment, and potential profits and the amount of oil US Energy produced. In addition, Hilton had a boiler room for salesmen to help him solicit investments. Hilton raised around $2.5 million.
In a different offering, Hilton raised around $789,000 by offering and selling unregistered partnership interests in companies that supposedly generated profits from oil drilling projects. Hilton made false statements that claimed the oil fields at issue were abandoned by Exxon Mobil Corp. because Exxon did not have the technology to get the oil. Hilton overstated the amount of oil produced and greatly exaggerated his experience in the oil industry. Hilton also hid that in addition to the prior SEC action, several states have ordered him not to sell securities. Finally, Hilton took a substantial amount of investor money for his personal use.
The SEC charged Hilton with and his companies with violations of Sections 5(a) and (c) and 17(a) of the Securities Act and Sections 10(b) and 15(a) of the Exchange Act and Rules 10b-5 (a), (b) and (c). The SEC seeks disgorgement plus prejudgment interest, civil monetary penalties, and permanent injunctions against Hilton and his companies.