2. Charles Reed Cagle
When the prices of oil, natural gas, and other energy commodities rise, investment scams inevitably
proliferate. Organizations such as the North American Securities Administrators Association, the official
professional body of state securities regulators, and the United States Securities and Exchange
Commission offer a few warning signs that might indicate an unscrupulous enterprise:
- Claims that sound too good to be true. Beware of statements that include “an oil well will definitely
be productive,” “cannot miss,” “guaranteed,” “few if any risks,” “shares are limited,” and “act
immediately.”
- Advertising based on recent high-profile news stories, such as details of swings in a volatile market.
- Unsolicited marketing materials, even those with high production values or those that arrive by
certified mail.
3. Charles Reed Cagle
What can consumers do to protect themselves?
- Do your research and contact your state securities oversight agency.
- Ask questions. Find out the name and level of energy expertise of the salesperson and the officials
of the company. Ask about the details of the investment, including purchaser liabilities.
- Ensure that customer funds will be held in escrow and not co-mingled with other financial streams.
- Get the lease terms of the energy fields involved. Inquire about surrounding properties and
competitors and obtain a third-party geologist’s report.
4. Charles Reed Cagle
Reed Cagle, founder of Colorado Springs, Colorado-based HEI Resources, works with clients to
facilitate partnerships and joint ventures in the oil, mining, and gas industries.
