Source Capital Group, Inc. sanctioned for misrepresentations
By Sean Sweeney on September 30, 2014
The Financial Industry Regulatory Authority ("FINRA") found that Source Capital Group, Inc. made material misrepresentations in its sale of two different private offerings of oil and gas securities: Blue Ridge Securities and Argyle Securities. Source Capital Group, Inc. was the sole seller of these private offerings. The violations included paying commissions to brokers that sold the investment from the company without disclosing the commission. In addition, Vincent Christopher and Thomas Gilleland, two brokers for Source Capital Group, Inc. were found to have made exaggerated and unfounded promises regarding the performance of these Argyle Securities.
Brokers have an affirmative duty imposed upon them to make fair and balanced presentations of an investment when discussing the risks and potential rewards. In that context, the content of the e-mails cited by FINRA are difficult to believe:
Gilleland wrote about the Argyle investment to a potential investor:
I have a very rare opportunity to you...[in which you have] "a potential of 6-8 times your money...For the first time ever, Argyle has included a producing natural gas well which will show you 25-30% annually right out of the gate! There is no guesswork here, the well is already drilled and producing averaging 7 million cubic feet of gas per day. Unbelievable!Christopher wrote to a potential investor:
final results still promising @ roughly 6 [dollars return] to 1 [dollar invested] and an annual return of apx. 80% between both wells w/ WAY less risk;and
the producing well we are offering you... has generated a steady 70k a month in income, [so] we are considering closing the program tomorrow and keeping the remainder for ourselves. I only have a small portion left @ this point....The firm was fined $100,000.
If you have purchased either the Argyle or Blue Ridge Securities from Source Capital Group, Inc. or are the victim of some other exaggerated and unbalanced sales presentation for securities you have purchased, give us a call at 414-271-3400 or send an e-mail to Atty. Sean M. Sweeney at email@example.com
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