U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23536 / May 11, 2016
Securities and Exchange Commission v. Charles O. Couch and Couch Oil & Gas Inc., Civil Action No. 3:14-cv-01747-D (NDTX) (May 9, 2016)
Oil and Gas Investment Scheme Perpetrators Settle SEC Charges
On May 9, 2016, the U.S. District Court for the Northern District of Texas entered a final judgment against Charles O. Couch of Irving, Texas and his company, Couch Oil & Gas Inc., enjoining them from offering or selling securities and from violating antifraud and securities registration provisions of the federal securities laws. The final judgment also requires them to pay more than $7 million in monetary relief.
The Commission filed its case on May 12, 2014, alleging that Couch and his company falsely claimed that investors would receive working interests in oil and gas wells when Couch and Couch Oil & Gas retained those working interests and never transferred them to investors. The complaint also alleged that offering materials given to investors contained unsubstantiated and inflated projections about anticipated production and that the defendants commingled and misapplied investor proceeds by using funds from one project to pay expenses in another without investors' knowledge and contrary to what the defendants promised.
The final judgment enjoins Couch and Couch Oil & Gas from issuing, purchasing, offering, or selling any securities in the future, except for their own account. It also enjoins them from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933. The judgment further orders Couch and Couch Oil & Gas to pay disgorgement of $6,260,025, plus $811,788.87 in prejudgment interest. Each defendant must also pay a civil penalty of $300,000. The defendants consented to the entry of the judgment without admitting or denying the allegations in the complaint.
The SEC's litigation was led by Janie L. Frank, Timothy L. Evans, Jessica Magee, and David Reece of the Fort Worth Regional Office. The matter was investigated by Tamara McCreary, Ty Martinez, Joseph Dugan, Douglas Gordimer, and Jonathan Scott. David Peavler supervised the matter.
For further information, see Litigation Release No. 22990 (May 13, 2014).