Did you Lose Money Investing in the Payson Petroleum, Inc. 3 Wells Program with Matthew or William Griffin?
Posted on Tuesday, December 19th, 2017 at 9:56 am
Erez Law is currently investigating brothers Matthew C. Griffin and William D. Griffin (CRD# 4208630), who are alleged to make numerous misrepresentations to investors in connection with the oil and gas well project for their company Payson Petroleum, Inc. Payson Petroleum, Inc. was a Grayson county, Texas-based company that was offered by registered brokers and brokerage firms across the country, including:
- A. Repple & Company
- Balanced Financial Securities, LLC
- CFD Investments Inc.
- EDI Financial Inc.
- Financial West Group
- H. Hill Securities LLLP
- MidAmerica Financial Services
- Moloney Securities Co., Inc.
- PTX Securities, LLC
- Security Research Associates Inc.
- Wall and Company Securities
- Whitehall-Parker Securities, Inc.
Payson Petroleum was incorporated by Matthew C. Griffin in 2008. Matthew C. Griffin then proceeded to create Payson Operating in 2010 with Payson Petroleum as the sole member of the limited liability company (LLC). Matthew C. Griffin created Payson Operating to serve as oil and gas operator to Payson Petroleum’s wells. Payson Petroleum and Griffin began to solicit investments from private investors to fund the building of these wells and the operations.
Payson Petroleum, Inc. and Payson Operating, LLC filed for chapter 7 bankruptcies in June 2016 (and later converted to chapter 11 bankruptcy), leaving unsecured investors holding $23 million in losses.
In November 2016, the Securities and Exchange Commission (SEC) filed a complaint against the Griffin brothers accusing them of fraudulently raising $23 million from 150 investors offering interests in two Texas partnerships. According to the SEC from November 2013 and July 2014, Payson Petroleum, Inc. raised funds to complete three wells, and following the completion of these wells, Matthew Griffin and Payson Petroleum launched the 3 Well Program.
The SEC alleged that the Griffin brothers misled investors about Payson Petroleum, Inc.’s participation in the 3 Well Program and their compensation as the program’s sponsor and operator. The SEC alleged that “the Griffins misrepresented to the investors: i) that Payson would contribute, up-front, 20% of the offering amount, or $5.4 million, and that this capital infusion would cover 20% of the cost of the wells; ii) that Payson’s consideration as program sponsor/operator/co-investor would be limited to 20% of any petroleum revenue generated by the wells; and iii) that Payson would cover any cost overages, beyond the estimated $24 million, in drilling and completing the wells. The SEC further alleges that these were misrepresentations because, in fact: i) Payson contributed no money to the offering and paid nothing toward the well costs; ii) Payson appropriated the entirety of the offering proceeds net of offering costs; and iii) Payson lacked the financial means to pay even the smallest cost overage.” According to the SEC, Payson Petroleum, had only $58,722 in its bank account when it began its offering.
Payson Petroleum raised more than $20 million through various private placements, including:
- Payson Petroleum, Inc.
- Payson Petroleum Jenny #1, L.P.
- Payson Petroleum J.C. #1, LP
- Payson Petroleum Grayson 2 Well, LP
- Payson Petroleum Crowe 1, LP
- Payson North Texas Multi-Well I, LP
- Payson Petroleum Brown No. 1 L.P.
- Payson Petroleum 3 Well, LP
- Payson Petroleum 3 Well 2014, LP
- Payson Developmental Drilling Fund 2014 II, LP
- Payson Drilling Fund 2015 I, LP
- Payson Drilling Fund 2015 II, LP
Matthew Griffin was the founder, sole owner, president, and CEO of Payson Petroleum, Inc. Matthew Griffin also held positions with Lone Star Securities and Red Rock Energy.
William Griffin was the Chief Administrative Officer and a member of the board of directors. The brothers were alleged to make numerous misrepresentations to investors in connection with the oil and gas well project.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, financial advisors across the country may be liable for investment or other losses suffered by their customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.