Fracking has been a huge and debatable issue in the United States for years, but recently a major fracking company has come under scrutiny for another reason. On Friday, the U.S. Securities and Exchange Commission charged Breitling Energy Corp, its chief executive Chris Faulkner, and seven other people with defrauding investors out of approximately $80 million by misleading them about the value of oil and gas assets. A civil lawsuit states that Faulkner, CEO of the Texas-based drilling company, deceived hundreds of unsuspecting investors out of millions of dollars.
The unlawful gains were used by 39 year-old Faulkner to fund “a lifestyle of decadence and debauchery,” the SEC said, including lavish travel and the use of expensive escort services. Allegedly, Faulkner misused investor interest in the shale oil boom to run the scheme in which he fraudulently sold investments in more than 20 oil and gas prospects in multiple states. The SEC said the investments were “replete with material misrepresentations and omissions”.
The SEC believes that Faulkner and his associates knowingly lied to investors about the cost of drilling and completing wells, and the anticipated earnings for the prospects. In the suit, the SEC stated, “Faulkner and his co-defendants duped hundreds of people out of millions of dollars by intentionally and repeatedly lying about several aspects of the investments”. According to the suit, Faulkner personally misappropriated at least $30 million of investor funds.