SEC charges Texas oil-and-gas fund managers with $17 million fraud

Patrick Duke and Paul Haarman of APEG Investors allegedly kept $2.6 million of what they raised from investors.

The Securities and Exchange Commission has charged Texas-based investment adviser APEG Energy and its owners, Patrick E. Duke and Paul W. Haarman, with fraudulently raising more than $17 million for an oil-and-gas investment fund they managed.

The agency also charged the two with misappropriating over $2.6 million from the fund.

The complaint seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest and civil penalties against each defendant.

[More: $1.8 billion mutual fund halts redemptions over alleged fraud]

According to the SEC’s complaint, from approximately December 2015 to October 2016, the fraudulent scheme engineered by Duke and Haarman involved the sale of limited partnership interests in the fund.

The two allegedly made several false and misleading statements to investors about the risks of investing in the fund, their compensation for managing the fund, and their expertise in the oil and gas industry.

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