Investor's Watchdog.com: Stock, finance and investment protection for investors

The Securities and Exchange Commission (SEC) has filed a civil action against Star Explorations, Inc. and its principal, James T. Gurgainers, for allegedly conducting a fraudulent oil and gas scam.  According to the SEC, Gurgainers raised over $12 million from over 160 investors between December 2005 and May 2008.

Specifically, the Commission alleges that, among other things, Gurgainers solicited investors for completion funds for dry holes, failed to use investor funds as offering materials represented, and improperly pooled and commingled investor funds from different ventures contrary to offering materials.

The complaint also alleges that Gurgainers used new investor funds to pay other investors and diverted at least $700,000 to his personal accounts. 

Take it from someone who has been swimming in an ocean of reckless brokers and scam artists for 18 years:  this type of misconduct is common.  It continues to go on because investors cannot accept that it might happen to them.  The big lie is that investment fraud is rare. Bernard Madoff has shined a spotlight on it. But experience teaches that that light will fade, investors will soon forget Madoff and his scam, and people will continue to lose their life savings for want of sufficient pre-investment investigation. 

Do you know what your broker is doing with your money?  Is he paying his mortgage with it or making his car payment?  Or is it where he says it is?  The only way you can know for sure is to investigate your broker by asking a former SEC Branch Chief for a safety rating.