JNL Oilfield Instruments and Founder Jeffery McCollum Charged with Operating a Ponzi Scheme
The Securities and Exchange Commission (“SEC”) announced that it has charged Odessa, Texas-based JNL Oilfield Instruments, LLC and its founder Jeffery McCollum with operating a multi-year Ponzi scheme.
According to the SEC’s complaint filed in the U.S. District Court for the Western District of Texas, defendants raised more than $12 million from approximately 30 investors by offering investment contracts for the purchase and resale of oilfield services equipment. The complaint alleges that McCollum told investors that their money would be used to invest in used equipment that JNL would purchase and resell for large profits. In reality, as the complaint alleges, defendants were not purchasing the equipment and were instead using investor funds to pay off earlier investors and to pay McCollum’s personal expenses. The complaint further alleges that when investors requested details about equipment transactions, McCollum made up stories about fictitious pieces of equipment and phantom buyers, sent photographs of unrelated equipment, and sent investors fake equipment invoices that he had created.
Without admitting or denying the SEC’s allegations, McCollum and JNL agreed to a settlement that permanently enjoins both McCollum and JNL from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, requires them to pay a $160,000 penalty, and requires them to pay disgorgement and prejudgment interest in amounts to be determined at a later date. The settlement is subject to court approval.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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Brenda Hamilton, Securities Attorney
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