SEC Charges Convicted Felon with Defrauding Seniors and Making Misleading Statements in SEC Filings

In a recent development, the U.S. Securities and Exchange Commission (SEC) has taken legal action against convicted felon Stephone N. Patton and his associated companies, including Star Oil and Gas Company, Inc., North Gulf Energy Corporation, Inc., and Patton Farms, Inc. These entities, collectively referred to as “the Patton Entities,” have been charged with a series of offenses, including making false statements in multiple SEC filings and defrauding seniors.

The SEC’s complaint alleges that over the period spanning from 2020 to 2023, Patton submitted false statements in at least thirty Form D filings on behalf of the Patton Entities. Furthermore, it is alleged that Patton created a fictitious Star Oil website that contained misleading claims, such as boasting 31 offshore oil platforms, annual revenues of $16 billion, and a workforce of over 32,000 employees. In stark contrast to these claims, the complaint reveals that the Patton Entities had no operational business activities, possessed no assets, and generated zero revenue.

Additionally, the complaint states that Patton engaged in deceptive practices by providing false information to at least two elderly individuals. These misrepresentations pertained to the utilization of investor funds, promised returns, dividend payments, Patton’s professional background, and educational qualifications. Crucially, Patton failed to disclose his multiple convictions for identity theft and grand larceny in Florida and Mississippi.

The SEC’s complaint further accuses Patton of misappropriating $53,000 from the two seniors, diverting these funds to cover personal expenses.

In response to these allegations, the SEC has filed a complaint in the U.S. District Court for the Middle District of Florida. The charges against the defendants include violations of the antifraud provisions outlined in Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, along with Rule 10b-5 thereunder.

The SEC is seeking a range of remedies, including permanent injunctive relief, the disgorgement of allegedly ill-gotten gains along with prejudgment interest, civil penalties against all defendants, an officer-and-director bar, and a conduct-based injunction specifically aimed at Patton. Furthermore, the SEC is requesting an order mandating the permanent deactivation of Star Oil’s misleading website.

If you suspect your advisor mismanaged your money or committed negligence or fraud, call Sonn Law Group for a free consultation at 833-912-3000 today.