FINRA has barred the former President of The Patriot Group Securities James Charles Allen after investigators determined Allen negligently allowed misleading investment documents to be distributed Because Allen himself did not appear and testify during the investigation per FINRA's requests, the decision of banishment was made by default.
According to FINRA, while President of Patriot Group, Allen authorized the sale and distribution of private placement memorandums (PPMs) for four oil and gas offerings: Escondido 2008-C, Escondido 2009-A, Escondido 2009-B and Escondido 2010-A.
The PPMs stated that Escondido employed a new "revolutionary and proprietary" drilling technique that could foreseeably increase well production up to 10-fold, compared to previous production.
FINRA believes that by January 2010, Allen became aware of production problems in the 2008-C wells related to the new technique.
FINRA examined the Escondido PPMs and determined that despite this knowledge, Allen did not ensure PPMs sent to investors were free from containing misrepresentations or omission of material facts.
Allen's actions were furthermore deemed "negligent" by FINRA and Allen's subsequent failure to appear and testify in connection to this investigation as requested by FINRA necessitated the imposition of a bar from association with any FINRA member firm.
FINRA requires registered supervisors or those in a position to make ensure firm publications intended for public distribution and use, such as PPMs, are accurate and do not misrepresent or omit material facts.
If you have invested with The Patriot Group Securities regarding the Escondido wells or with any other broker or firm whose investment publications have been inaccurate or otherwise in violation of industry rules, and such deception has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.