Commissioner Issues Order Against Company Targeting Laid-Off And Retired Teachers

May 16

Securities Commissioner Benette L. Zivley on May 13, 2011, entered an Emergency Cease and Desist Order against a North Texas company and its affiliate, alleging the fraudulent sale and marketing of oil and gas interests to teachers and other school district employees.

Insignia Energy Group Inc. and its affiliate IEG Permian Basin LLC are marketing partnership interests in oil and gas projects to current and former teachers and other employees of school districts in Texas. The Order also names Martin D. Lewis, the president of Insignia and IEG, and salesman J.W. Willis, also known as Jarvis Wayne Willis.

Insignia and IEG are based in Addison. Insignia, IEG, and Willis are telling educators "that the investment will enable school teachers to replace 'much-needed income' in light of 'looming lay-offs,'"according to the Findings of Fact in the Order. The companies and Willis are also encouraging school district employees to use their retirement savings to invest in the oil and gas partnerships.

Insignia, IEG, Willis and Lewis are violating the Texas Securities Act because they are not registered to sell securities in Texas; the investments themselves are not registered; and they are making misleading statements to potential investors.

The partnership interests are being touted as risk-free and "iron-clad safe and secure."

However, the exploration projects being marketed and sold "involve a substantial degree of financial risk and there are no assurances that investment funds will result in projected levels of revenue or permit the recoupment of investment principal,"the Order states.

Insignia, IEG and Willis are guaranteeing the performance of the investments in oil and gas projects in Louisiana and offering a "1,000% [g]uarantee"that investors will receive a particular monthly return over 10 years. Among the returns the entities and Willis are touting:

  • An investment of $21,000 reportedly entitles an investor to a minimum return of $5,000 per month;
  • An investment of $45,000 reportedly entitles an investor to a minimum return of $15,000 per month.