The Wolper Law Firm, P.A. is expanding its investigation of certain unregistered equity and debt securities issued by Resolute Capital Partners, LLC, Homebound Resources, LLC and PetroRock Mineral Holdings, LLC. (collectively, the equity and debt securities are referred to as the “Resolute/Petrorock Investments”). The Wolper Law Firm has already filed claims against SEC registered Investment Advisor, Financial Gravity, and its former Investment Adviser Representative, Devin Patel, along with Charles “Chuck” Oliver, who owned Hidden Wealth Solutions.
The issuers of the Resolute/Petrorock Investments used these and other sales agents around the country to sell interests in the Resolute/Petrorock Investments to ordinary retail investors. If the agents that sold you these interests were registered with a FINRA member brokerage firm or SEC registered Investment Adviser, you may have recourse to recover investment losses.
The following registered representatives are alleged to have been involved in the sale of Petrorock/Resolute Investments and the Wolper Law Firm has been contacted by clients of same:
- Christopher Most (CRD #3270353), formerly registered with Wealthforge Securities, LLC
- Jason Jodway (CRD#2998141), formerly registered with Allstate Financial Services, LLC and Securian Financial Services, Inc.
- Edward “Toby” Smith (CRD # 2012234), registered with Caldwell Sutter Capital, Inc.
- Monica Felton (CRD #5777169), registered with the Elliot Group
- Deborah Riley and Kurt Berry (CRD #455773), formerly registered at Vanderbilt Securities, Vanderbilt Advisory Services, Regulus Advisors, LLC and Regal Investment Advisors, LLC
- Michael Hall (CRD 2261130), registered at Core Wealth Partners, LLC
- Paul Partridge (CRD # 707115) and Ian Welham, formerly registered at City Center Advisors, LLC
What Happened with Resolute Capital Partners, LLC and PetroRock Mineral Holdings, LLC?
Resolute Capital Partners, LLC, Homebound Resources, LLC and PetroRock Mineral Holdings, LLC issued unregistered equity and debt securities to ordinary retail investors, many of whom were at the age of retirement. The Resolute/Petrorock investments were represented to be safe, income producing investments with unique tax benefits. Among the Resolute/Petrorock investments that were offered to retail investors include Strategic Energy Assets III, IV, V, VI, VII & VIII, Choice Energy Fund I, II & III, Advantage Capital Holdings I, Legacy energy I & II, and PetroRock Mineral Holdings Lenders Fund I, II, III & IV.
In September 2021, the Securities and Exchange Commission (‘SEC”) initiated an enforcement action against the issuers of the Resolute/Petrorock investments for violation of the Securities Act of 1933, Securities Exchange Act of 1934 and Investment Advisers Act of 1940. According to the SEC’s enforcement action, between 2016 and 2019, the Resolute/Petrorock entities and salespeople acting on their behalf, sold more than $250 million of debt and equity securities in unregistered offerings. The SEC asserted that the issuers engaged in securities fraud and failed to properly register the Resolute/Petrorock investments. In addition, the SEC alleged that issuers of Resolute/Petrorock insufficiently supported projections of oil production, cash reserves and made incomplete disclosures regarding potential uses of investor funds, including the amount of funds that would be used for payments to prior debt and equity investors. The issuers also made material misrepresentations in offering materials, “one-pagers” used for marketing the Resolute/Petrorock investments and in marketing materials. These representations were, in turn, parroted by investment professionals without first conducting any due diligence.
FINRA Regulatory Notice 10-22, which governs due diligence of private placements, “reminds broker-dealers of their obligation to conduct a reasonable investigation of the issuer and the securities they recommended in offerings.” “A BD ‘may not rely blindly upon the issuer for information concerning a company, nor may it rely on the information provided by the issuer and its counsel in lieu of conducting its own reasonable investigation…firms are required to exercise a ‘high degree of care’ in investigating and independently verifying an issuer’s representations and claims.” FINRA NTM 10-22 requires that “broker-dealers…conduct a reasonable investigation of the issuer and the securities they recommend…” These regulations extend to:
- “The issuer and its management”
- “The business prospects of the issuer”
- “The assets held by or to be acquired by the issuer”
“When presented with red flags, the BD must do more than simply rely upon representations by issuer’s management, the disclosure in an offering document or even a due diligence report of issuer’s counsel.”
The claims involving the Resolute/Petrorock Investments are clear cases involving failed due diligence and the sale of unregistered securities.
What Should I Do If I Invested in the Resolute/Petrorock Investments?
If you invested in the Resolute/Petrorock Investments, and have experienced investment loss, you may be entitled to recover those losses. The Wolper Law Firm exclusively represent investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper has handled more than 1,000 securities cases throughout his career. We can be reached at 800.931.8452 or by email at email@example.com.