An investment manager who called himself the “Frack Master,” has agreed to serve 12 years in federal prison and pay restitution of $23.8 million for his involvement in a wide-ranging oil and gas drilling scheme that raised $80 million from hundreds of investors, the Securities and Exchange Commission announced Tuesday.
Christopher A. Faulkner, who called himself the “Frack Master” to try to make himself sound like an expert in oil and gas drilling, reached a plea agreement on criminal charges of securities fraud, money laundering and tax evasion filed by the U.S. Attorney for the Northern District of Texas. He also agreed to settle civil charges of securities fraud brought by the SEC. He is currently in custody.
During his heyday between 2012 and 2016, Faulkner appeared on CNBC, CNN and Fox Business and hosted a weekly radio show in Dallas.
According to the SEC complaint, Faulkner systemically deceived investors across the country by giving out false offering materials, misappropriating millions of dollars of investor funds, and manipulating the stock of Breitling Energy Corporation, a publicly traded company he controlled.
He started the scheme in 2011 through his privately held company, Breitling Oil and Gas Corporation, which sold oil and gas interests to investors. As part of these offerings, Faulkner lied to investors about his experience, the drilling-cost estimates for the prospects, and the use of their invested funds, the SEC said. Both companies were put under court-ordered receivership earlier this year.
Faulkner used $23.8 million of investors’ money to fund his lavish personal lifestyle, the complaint said. The SEC also charged 11 other individuals and entities for their roles in the misconduct, reaching settlements with a majority of them.