MONTPELIER – Susan L. Donegan, commissioner of the Department of Financial Regulation, announced today that more than $130,000 was returned to Vermonters who invested in an oil and gas exploration project in Texas. An additional $20,000 was paid in fees and penalties and a portion will go to the department’s investor education fund.
An investigation by the department determined that Luther Gutknecht and Kenneth P. Smith, both sales representatives for Surety Services LLC of Delaware, were doing business in Vermont but were not registered to do so.
In June 2008, several Vermont residents were invited to Surety’s South Burlington office for a presentation by the president of the Texas company, AOE Operators. As a result, four Vermonters and one Vermont company purchased interests in the oil and gas rights of AOE. The shares were not registered in Vermont, which is also a violation of Vermont law.
Donegan cautioned that investing in oil and gas projects can be especially risky.
“Always be sure of where your money is going,” she said, “before you invest, find out if the company and the sales people are registered to sell investments in Vermont. A quick call to the Department of Financial Regulation’s Securities Division can put your mind at ease.”