DENVER—A Colorado Springs man and his two oil and gas companies have agreed to pay $510,000 to settle civil fraud allegations, the Securities and Exchange Commission said Thursday.
The SEC alleged that between March 2002 and December 2006, Donald H. Allen and his companies H&M Petroleum Corp. and American Energy Resources Corp. raised about $9.9 million from more than 350 investors nationwide, without disclosing that they had never generated profits for investors.
Allen did not immediately respond to a telephone message.
Allen was accused of spending $2.3 million of investor funds to pay for items including a custom speedboat, ski vacations, fitness equipment and jewelry.
The SEC alleged Allen and his companies touted annual returns of up to 354 percent without disclosing the speculative nature of the projections; incorrectly told investors that AER and H&M invested in their own projects; that securities were improperly sold in unregistered transactions; and that Allen acted as an unregistered broker.
Allen and his companies settled the case without admitting or denying the allegations.
