Hosting Mogul Turned FrackMaster Gets Nailed By SEC For Allegedly Spending Investor Money On Hos and

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The U.S. Securities and Exchange Commission is suing Breitling Energy Corporation of Dallas, Texas, and its CEO, "Frack Master" Chris Faulkner, for fraudulently spending $80 million dollars of investors' money on fancy dining, luxury cars, strippers, sex workers, and all the other fixins of a jet-setting sociopath's lifestyle.
http://boingboing.net/2016/06/27/sec-sues-frack-master-ce.html

Inside an $80 million energy scam: The SEC's story of Dallas' Breitling Energy
http://www.dallasnews.com/business/energy/20160627-inside-an-80-million-energy-scam-the-sec-s-story-of-dallas-breitling-energy.ece


SEC announcement:


 


U.S. SECURITIES AND EXCHANGE COMMISSION



Litigation Release No. 23582 / June 24, 2016



Securities and Exchange Commission v. Chris Faulkner, et. al, Civil Action No. 3:16-cv-01735-D (N.D. Tex. June 24, 2016)



The Securities and Exchange Commission today charged four companies and eight individuals in an $80 million oil and gas fraud orchestrated by a Dallas man who calls himself the "Frack Master" for his purported expertise in hydraulic fracturing.


The SEC charged Chris Faulkner - the CEO of Breitling Energy Corporation (BECC) and frequent guest on CNBC, CNN International, Fox Business News, and the BBC to discuss oil-and-gas topics - with disseminating false and misleading offering materials, misappropriating millions of dollars of investor funds and attempting to manipulate BECC's stock. The SEC also charged BECC and suspended trading in BECC's securities for 10 business days.


According to the SEC's complaint, Faulkner started the scheme dating back to at least 2011 through privately-held Breitling Oil and Gas Corporation (BOG), which offered and sold "turnkey" oil and gas working interests. Faulkner ran most of BOG's operations, while co-owners Parker Hallam and Michael Miller oversaw the sales process. The SEC alleged that BOG's offering materials contained false statements and omissions about Faulkner's experience, estimates for drilling costs, and how investor funds would be used. The SEC further alleged that the offering materials included reports by licensed geologist Joseph Simo that included baseless production projections and failed to disclose his affiliation with BOG. The scheme evolved to include BOG's successor, BECC, a reporting company with shares traded on OTC Link and two affiliated entities, Crude Energy LLC and later Patriot Energy Inc. Faulkner allegedly established Crude and Patriot to deceive investors through offerings similar to those conducted by BOG. The complaint alleges that even though investors thought Hallam and Miller ran these two entities, Faulkner directed much of Crude's and Patriot's operations. The SEC alleged that BOG, Crude and Patriot raised more than $80 million from investors as part of these deceptive offerings.


The SEC alleged that Faulkner misappropriated at least $30 million of investor funds for personal expenses, including lavish meals and entertainment, international travel, cars, jewelry, gentlemen's clubs, and personal escorts.  The SEC alleged that Beth Handkins, a former employee of Crude and Patriot, Rick Hoover, the former CFO of BECC, and Jeremy Wagers, BECC's general counsel and COO, all played essential roles in assisting Faulkner in the alleged fraud.


The SEC also alleged that Faulkner, Wagers and Hoover misrepresented various aspects of BECC's operations in BECC's public reports, including statements about the company's financial performance, and its relationship to Crude and Patriot. In addition, while in the middle of perpetrating this fraud on investors, Faulkner engaged in a scheme to manipulate the price of BECC's stock, with the assistance of former BECC employee Gilbert Steedley, by placing trades at the end of the day to "mark the close" of the stock.


The SEC charged Faulkner, Hallam, Miller, Simo, Handkins, BOG, Crude, and Patriot with violations of the antifraud provisions for their respective roles in the offering frauds, and charged BECC, Faulkner, Wagers, and Hoover with violations of the antifraud, reporting, recordkeeping and internal controls provisions of the federal securities laws. The SEC also charged Faulkner, Wagers, and Hoover with lying to auditors, and charged Faulkner and Hoover with violating certification provisions of the Sarbanes-Oxley Act. Faulkner faces additional fraud charges based on his alleged manipulation of Breitling Energy's stock, and the SEC charged Steedley was charged with aiding and abetting Faulkner's manipulative conduct.


Miller, Handkins and Steedley have offered to settle the Commission's action against them on a bifurcated basis. Each will agree to full injunctive relief, including a conduct-based injunction for Miller, and will have the Court determine the appropriate disgorgement and civil penalties at a later date upon motion by the Commission.


The SEC's investigation, which is continuing, has been conducted by Scott Mascianica, Ty Martinez and Melvin Warren and supervised by Eric Werner and David Peavler. The SEC's litigation will be led by B. David Fraser and Mr. Mascianica.


copy of the SEC complaint: https://www.sec.gov/litigation/complaints/2016/comp-pr2016-130.pdf


note: I am really enjoying this and I only spent 3 nightmarish weeks as a CI Host customer in 1998.  I can only imagine how overjoyed people who suffered far longer and were customers for months or years are at this joyous news. 


note 2: for the young'uns:  Faulkner's mother was a lawyer and during his time at CI Host dozens of lawsuits were filed against critics, competitors, etc (and many lawsuits were also filed against CI Host).  CI Host once sued WHT's former owner Everyone Internet for posts left on WHT by critics of CI Host (CI Host lost the case in federal court).
 
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SafehouseCloud

New Member
Verified Provider
Oh yes the bad CI Host times. I still remember when masked thieves storm the DC of CI host. At least that was the official story. Funny that a few month I wonder what happens to Faulkner ... Now we knows ... One of the bad example of the early hosting guys.
 

drmike

100% Tier-1 Gogent
Oh, like those not drunk / high didn't see this coming :)


Faulkner is a sociopath.   Entirely of the same cloth Jonny Nuggets was cut.  The guy named this shitco. Brietling, after uppity overpriced wrist piece.

"lavish meals and entertainment, international travel, cars, jewelry, gentlemen's clubs, and personal escorts"
Sounds like many of these insecure hosting shit heads CEOs.  Oh look at me dancing girl,  I have a bling-bling wrist piece.... I have a fist full of dolla bills yo'.  I drive a luxury car... Go on vacations weekly...


... and I can't function / put time in with opposite gender, so I pay whores for attention.  Freaks.


Faulkner needs prison time.



Like I said prior:


Chris Faulkner :) CI Host.


I recall the story from another circle (i.e. that douchenozzle being quotable for fracking while having the brains and experience in such of a goose egg).


Faulkner is the prototype for asshats in this industry and perpetual get rich-at-any-cost scammers.  


See:


http://www.texasobserver.org/the-lite-guv-and-the-frack-master/


... and I entirely in past didn't relate Faulkner and CI Host to random Chicago DC that was burglarized / robber multiple times:


http://www.theregister.co.uk/2007/11/02/chicaco_datacenter_breaches/
 
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