Texas 'Frack Master' bilked investors out of millions, SEC says
By Jessica Resnick-Ault and Joshua Schneyer
NEW YORK (Reuters) - Texas oilman Chris Faulkner built a high-profile public persona, raised millions for his oil and gas ventures and courted politicians. But the SEC has alleged that behind the scenes, he cheated investors out of $80 million to fund a "debauched" jet-setting lifestyle.
The U.S. Securities and Exchange Commission on Friday filed a lawsuit that alleges a stunning failure of corporate governance at Faulkner's Dallas-based Breitling Energy Corp BECC.PK and other companies he helped to create.
Based upon inflated estimates of the oil and gas that his companies controlled, the charges said, Faulkner lured hundreds of U.S. investors to back his firms. Their investments were largely used to pay personal expenses for Faulkner, his associates, family and friends, the SEC alleged.
Faulkner, 39, faced a spate of lawsuits in the early 2000s in connection with his previous web hosting business .
The businessman turned his attention to energy drilling during the U.S. shale boom in the last decade. His companies boasted of holding prime drilling real estate in regions like Texas, Oklahoma and North Dakota.
But after raising funds, Faulkner did little drilling and instead racked up millions in credit card charges, the SEC said.
The lawsuit charged Breitling CEO Faulkner, three related companies and seven other people for activities starting in 2011.
Faulkner, the self-proclaimed "Frack Master," was frequently featured in the media, including Reuters, offering rosy projections about shale drilling and his own companies' prospects. Continued...