June 5, 2018
By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-The US Securities and Exchange Commission (SEC) on Tuesday announced fraud charges against musician Paul Gilman and his companies, alleging that nearly all of the money they raised in securities offerings went to fund Gilman’s lavish personal spending in Las Vegas and California.
A statement from US SEC says Gilman used his companies – Oil Migration Group LLC, WaveTech29 LLC and GilmanSound LLC – to fraudulently solicit retail investors, including a nurse, a minister, and a businessman.
“Gilman, a self-dubbed “Whale Whisperer” who produced and starred in a documentary of his encounters with whales, claimed to be developing a revolutionary “soundwave” technology that would transform the oil and gas industry,” the statement said.
SEC says according to the complaint, Gilman told OMG and Wavetech investors that he would use their funds to test, validate, further develop, and license the soundwave technology for use in oil and gas industry applications, and he promised the investors substantial profits.
“Instead, Gilman is alleged to have used substantially all of the investor funds for his personal benefit, including to pay for luxury Las Vegas hotels, restaurants, designer clothing, and large cash withdrawals at casino ATMs. Gilman also allegedly defrauded investors in GilmanSound, a company he claimed would revolutionise sound systems in sport stadiums,” the Commission added.
SEC says while GilmanSound provided some real services to major-league baseball stadiums, the SEC’s complaint alleges that a substantial amount of the GilmanSound investor funds also were misused for Gilman’s personal expenses.
SEC filed charges in federal court in Dallas against Gilman, Oil Migration Group, Wavetech, and GilmanSound with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks permanent injunctions, disgorgement, and civil penalties.
The Commission says its investigation was led by David Whipple and Keith Hunter, and supervised by Eric R. Werner of the SEC’s Fort Worth Regional Office. “The SEC’s litigation will be led by Keefe Bernstein and supervised by David Fraser,” the statement affirmed.
The SEC encourages investors to check the backgrounds of people selling them investments by using the SEC’s investor.gov website to quickly identify whether they are registered professionals.
