SEC Obtains Final Judgment Against Texas Oil and Gas Fraudster and His Companies
The U.S. District Court for the Northern District of Texas entered a final judgment against defendants Leon Ali Parvizian a/k/a Alex Parvizian and his two Dallas-based companies, Arcturus Corporation and Aschere Energy LLC (together, the Parvizian defendants).
The entry of the final judgment resolves all claims arising out of the U.S. Securities and Exchange Commission’s complaint filed in December 2013, which alleged that the Parvizian defendants defrauded at least 380 investors when they raised over $22 million between 2007 and 2011 through an unregistered offering of interests in six oil and gas well drilling projects, and that Parvizian acted as an unregistered broker.
The complaint alleged that Parvizian prepared and disseminated to prospective investors offering materials that included material misrepresentations and omissions regarding, among other things, material litigation involving Arcturus and Aschere. According to the complaint, Parvizian, Arcturus, and Aschere systematically, and without disclosure to investors, used the offering proceeds to pay the costs of defending and settling the litigation. The complaint further alleged that, among other things, Parvizian prematurely called for completion funds on at least two projects before he had finished drilling and testing the wells because he had already spent the offering proceeds for non-drilling project related expenses, including legal fees. According to the complaint, Parvizian, Arcturus, and Aschere spent only $7.9 million, or 36%, of the money raised to drill oil and gas wells.
The complaint also alleged that the defendants offered and sold the joint venture interests in unregistered securities offerings that were not exempt from the registration requirements of the federal securities laws.
The complaint charged the Parvizian defendants with violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. In addition, the complaint charged Parvizian with violations of Exchange Act Section 15(a).
On Oct. 6, 2021, the Parvizian defendants consented, without admitting or denying the SEC’s allegations, to a partial judgment resolving liability and deferring the imposition of remedies, if any, to be determined by the court after briefing. That same day, the court issued the agreed partial judgment. Thereafter, on March 1, 2022, the Commission filed its “motion for remedies” against the Parvizian defendants.
On Jan. 28, 2025, the court issued a memorandum opinion and order granting the Commission’s motion in full. In addition, the court entered a final judgment ordering the Parvizian defendants to pay, jointly and severally, disgorgement of approximately $9.8 million, plus prejudgment interest thereon of $938,770.65, and civil penalties of $500,000, and imposed permanent injunctions against future violations of the antifraud, securities-registration, and broker-registration provisions of the federal securities laws.
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