Daniel W. Fisher and J. Todd Tidmore, named as defendants in the Federal Trade Commission’s "Project Field of Schemes" investment fraud cases, have agreed in separate settlements to post performance bonds as a condition to any future involvement in the promotion of any investment, as part of an agreement with the FTC. The FTC had alleged that Fisher, his companies -- Gulfstar Corporation and Nova Gaz Corporation -- and Tidmore had made numerous misrepresentations when soliciting consumers to invest in oil drilling ventures. In addition to posting bonds, the individual defendants are jointly and severally responsible for monetary judgments totaling $3,250,000 and are prohibited from misrepresenting the risks and profitability of investments in oil drilling ventures and any other investments.
In June 1997, the Commission filed charges against Gulfstar Corporation, Nova Gaz Corporation, Nova Financial Corporation, Daniel W. Fisher and J. Todd Tidmore, alleging that the defendants made a number of false representations to consumers to get them to invest in oil wells in western Kansas -- the OZ Project and the Dorothy Project -- and in the Nova oil drilling project in Michigan. The defendants, among other things, represented that an investment in the Kansas venture was risk-free because consumers would receive all of their principal investment plus 50 percent even if the wells did not produce oil because of an agreement they had with Threadneedle Trust Company, a British firm, when, in fact, Threadneedle did not have sufficient assets to support such a cash-back guarantee. The court earlier issued a default judgment against Nova Financial Corporation. Gulfstar Corporation, Nova Financial Corporation, and Nova Gaz Corporation were headquartered in Dallas, Texas.
Under the terms of the settlements, the defendants are prohibited from misrepresenting material facts in connection with the promotion, advertising, marketing, or sale of oil drilling ventures and any other investments. They are also barred from conducting or participating in any telemarketing solicitation without compliance with all applicable federal and state registration and bond requirements.
In addition, the settlement with defendant Fisher requires him to post a $500,000 performance bond before engaging in or assisting others engaged in telemarketing or in the promotion, advertising, marketing, or sale of investments. The settlement also includes a $3,250,000 judgment against Fisher -- $1,200,000 against Gulfstar and $2,050,000 against Nova Gaz. The judgments ensure that defendants’ assets, if any, would be available for consumer redress. The settlement also requires Fisher to surrender all of his interest in the Nova oil drilling venture, which currently has some producing assets, to consumers who invested in the project.
The settlement with Tidmore requires him to post a $100,000 performance bond as a condition to any future involvement in the promotion of any investment. In addition, the settlement calls for a $2,050,000 suspended judgment against Tidmore, and he must surrender all of his interest in the Nova oil drilling venture to investors in the project.
Both settlements also contain standard record keeping provisions to assist the FTC in monitoring the defendants’ compliance.
The FTC filed the proposed settlements in the U.S. District Court for the Northern District of Texas, Dallas Division, on November 25, 1998. The settlements were signed by the judge on Nov. 30, 1998.
The Commission vote to approve the settlements for filing was 4-0, with Commissioner Orson Swindle concurring in part and dissenting in part. In a separate statement, Commissioner Swindle stated that most of the relief in the settlements is necessary and appropriate, however, he objected to the requirement that the defendants comply with state and federal registration and bond requirements because he could not "support provisions that ?empower the Commission to seek contempt sanctions for violations of another governmental entity’s laws.’"
NOTE: These stipulated orders are for settlement purposes only and do not constitute an admission by the defendants of a law violation. Consent settlements have the force of law when signed by the judge.
Copies of the news release are available from the FTC’s web site at http://www.ftc.gov and copies of the news release and settlements are also available FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326- 2710.
(FTC File No. X970060)
(Civil Action No. 3-97CV1508-G (N.D. Tex.))
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