SEC Says Convicted Fraudster Secretly Ran $42.7M Oil-Lease Offering
The U.S. Securities and Exchange Commission has asked a federal court in Fort Worth to compel 1859 Operating, LLC, five affiliated marketing and consulting entities, and six individuals connected to the company to comply with investigative subpoenas the agency first issued more than two years ago. The SEC’s application, filed Aug. 20 in the U.S. District Court for the Northern District of Texas, is part of a nonpublic investigation into whether 1859 and the other respondents violated federal securities laws in connection with the company’s sale of fractional undivided working interests in oil leases.
The SEC said 1859 and the other respondents have raised approximately $42.7 million since September 2021 by selling the working interests to investors in at least 40 states. The agency said its investigation has developed evidence that the offering involved materially false statements or omissions concerning the criminal background and management role of Duane Slade, the projected production rates and investment returns of 1859’s wells, and the company’s use of investor funds.
Duane Slade pleaded guilty in 2013 to federal fraud charges tied to a $166 million Ponzi scheme and a separate investment fraud, for which he was ordered to pay $2.5 million in restitution. He is not identified in public records as a manager or member of 1859, but the SEC said evidence shows he exercised managerial control over the company and received payments from investor funds. His wife, Alison Slade, and her company also allegedly received investor payments and the couple’s residence – titled solely in Alison Slade’s name – was paid for in part with 1859 investor funds. The SEC said 1859’s office building, located on the same property, was also built using investor money.
The SEC describes 1859 as a family-run operation. Duane Slade’s sons, Dallin Slade and Mason Slade, serve or have served as managing members of 1859 and own DMMD Marketing, Inc., which the SEC said received more than $17 million in investor funds and routed most of it to other respondent entities. Dallin Slade owns The Slade Group, Inc.; Mason Slade owns Slade Marketing, Inc.; Adam Fieldsted owns Centerfire Consulting, LLC; and Dillon Murrow, Duane Slade’s son-in-law, owns DM Sales Consulting, Inc. Each of those entities received payments traced to investor funds, according to the agency.
The SEC said it first issued subpoenas to the corporate respondents and several individuals in April 2024, and to Duane Slade in July 2024, seeking documents and testimony related to the offering. Settlement discussions paused compliance efforts for roughly a year, but the agency said that after those talks ended, respondents agreed to testimony dates through counsel and then canceled shortly before they were scheduled to occur, a pattern the SEC said recurred over the following 10 months. Of six individual respondents subpoenaed for testimony, only Dillon Murrow has appeared. The SEC said respondents have produced 8,344 documents, while respondents’ counsel has told the agency the responsive universe could run into the hundreds of thousands or millions of documents.
The SEC said respondents oppose its application. The agency said it is continuing its fact-finding investigation and has not concluded that any individual or entity has violated federal securities laws.
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