Last year, the SEC charged a Texas attorney with defrauding investors with regard to two securities offerings, one pertaining to an oil and gas exploration venture and the other a fracking water filtration business deal. The case was filed in the U.S. District Court for the Northern District of Texas against attorney Gregory G. Jones and Aquaphex Total Water Solutions.

The SEC recently filed a motion for summary judgment, stating in its brief that Jones should be ordered to pay a maximum civil penalty of $2,530,000, disgorgement of $985,000, and an additional disgorgement of $480,000 with prejudgment interest of $17,042.39.

In its original complaint, the SEC alleged that in 2009 Jones represented a group of European investors who invested about $6 million in an entity called Edwards Exploration. Jones had an agreement with Edwards in which Edwards was to pay him for performing particular services, including providing due diligence with relation to the European investors’ shares. The SEC claims Jones received $480,000 under the agreement, but he did not disclose to the investors that the money he received came from the investors’ principal.

The SEC alleges that between the summers of 2013 and 2014, Jones offered and sold securities issued by Aquaphex, purportedly in business to recycle fracking water, raising about $645,000 from nine investors. The Commission further claims that Aquaphex investment documents contained false statements, including claims that Aquaphex could be worth $21 billion in five years and that investors stood to make over 15% per year on their investments.

On September 21, U.S. District Judge John McBryde dismissed the SEC’s claims against Aquaphex except to the extent the Commission’s claims against it had not be previously resolved by the June 25 judgment granting a temporary injunction.

According to the order, “The dismissal was ordered because of repeated failures of SEC to comply with orders of the court directing it to either file proof of proper service of summons on Aquaphex or an instrument containing a satisfactory explanation, in affidavit form, as to why such proof could not be filed.”

McBryde also issued an order postponing the disposition of the motion to dismiss filed by Jones until trial.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.