The Securities and Exchange Commission's (SEC) Office of Investor Education and Advocacy is issuing an alert to educate individual investors about certain risks and possible fraudulent activity involving private offerings of securities for oil and gas ventures.
The number of fraud cases related to private securities offerings for oil and gas ventures has increased over the last few years. From few in 2005 and 2006, the number of SEC cases has averaged more than 20 per year since. State securities regulators have experienced a similar increase in cases over the past five years. All investing involves varying degrees of risk. Investing in private offerings, however, carries unique risks, and private oil and gas offerings have additional risks to consider.