On April 10, 2015, the Securities and Exchange Commission (“SEC”) announced that it has charged Mieka Energy Corporation of Flower Mound, Texas, and its founder and president, Daro Ray Blankenship, with investment fraud related to interests sold in two gas well drilling joint ventures.

According to the SEC complaint, Mieka and Blankenship raised more than $4.4 million from 60 investors by selling interests in joint ventures to drill two natural gas wells. The SEC alleges that Blankenship spent investor funds on unrelated projects and other expenses, and never completed the first well or started on the second well.

Blankenship is accused of misleading investors about their investments through deceptive “investor update” newsletters and public filings by its publicly traded parent company, Vadda Energy Corporation. Vadda is also charged with fraud and reporting violations.

In addition, the SEC has charged two Mieka Energy sales personnel — Robert William Myers, Jr., and Stephen Romo — with acting as unregistered brokers. The SEC alleges that Myers and Romo marketed and sold joint venture interests without being registered as broker-dealers or in association with any SEC-registered broker-dealer.

Specifically, Mieka and Blankenship are charged with violations of Section 17(e) of the Securities Act as well as Section 10(b) and Rule 10b-5 of the Securities Exchange Act. Vadda has been charged with violating Sections 10(b) and 13(a) and Rules 10b-5, 12b-20, 13a-1, and 13a-13 of the Exchange Act.

In addition, Blankenship is charged under Exchange Act Rule 13a-14, and for aiding and abetting and being a control person of the violations by Mieka and Vadda. The SEC also alleges Romo and Myers violated Section 15(a) of the Exchange Act.

The Cogdell Law Firm is a boutique law firm focusing on large, complex business and criminal financial-related litigation, including white collar criminal defense, securities fraud, health care fraud investigation, criminal appeals and state criminal defense. When results matter most, contact Dan Cogdell at (713) 426-2244 or [email protected]