A California securities salesman has agreed to pay more than $22 million for selling oil and gas investments without being a registered broker-dealer or being associated with a registered broker-dealer, the SEC announced Thursday.
The SEC charged Behrooz Sarafraz of Tiburon, Calif., with selling securities without being registered with the SEC. He has agreed to pay $16.4 million in disgorgement of his commissions, $6 million in interest and a $50,000 penalty.
“By failing to become associated with a registered broker-dealer, Sarafraz denied investors the protections of regulatory oversight and firm supervision,” says Michele Wein Layne, director of the SEC’s Los Angeles Regional Office.
According to the SEC’s complaint filed in federal court in San Francisco, Sarafraz acted as the primary salesman on behalf of TVC Opus I Drilling Program LP and Tri-Valley Corporation Bakersfield, Calif. From February 2002 to April 2010, these companies raised more than $140 million for their oil-and-gas drilling venture.
Sarafraz received commissions that ranged from 7 percent even to 17 percent of the sales proceeds that he and members of a sales network generated. The SEC says Opus and Tri-Valley paid Sarafraz approximately $18.3 million in sales commissions and he paid approximately $1.9 million to others as referral fees.