Litigation Release No. 24590 / September 12, 2019
Securities and Exchange Commission v. Timothy W. Crawford, et al., No. 19-CV-1022 (S.D. Ohio filed March 19, 2019)
The Securities and Exchange Commission announced today the entry of a final judgment against Cardinal Energy Group, Inc., a Texas-based oil-and-gas penny stock company, with fraudulently concealing the loss of the company’s major source of revenue.
As alleged in the SEC’s March 2019 complaint, Cardinal, based in Dallas, Texas, lost control of its interest in two oil-and-gas leases in mid-2017 that accounted for nearly all of the company’s revenue. Following the bad news, the complaint alleges that Cardinal and its former CEO, Timothy W. Crawford, filed quarterly reports with the SEC that misrepresented to investors that the company still expected the leases to be part of its future business plans. While concealing the setback to the business, Cardinal and Crawford allegedly raised additional money from investors and misreported Crawford’s stock ownership. The litigation against Crawford is ongoing.
Without admitting or denying the allegations of the complaint, Cardinal has consented to the entry of a judgment permanently enjoining it from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Sections 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder, and the reporting provisions of Sections 13(a) and 14(c) of the Exchange Act and Rules 12b-20, 13a-1, 13a-13, and 14c-6 thereunder.
In a related proceeding, and without admitting or denying the allegations, Cardinal consented to the issuance of a Commission Order pursuant to Section 12(j) of the Exchange Act revoking the registration of its common stock based on its failure to file quarterly and annual reports with the SEC.
The SEC’s investigation was conducted by Emily Rothblatt and Scott Hlavacek of the Chicago Regional Office, and was supervised by Jeffrey Shank. The litigation is led by Jonathan Polish.