Texas Energy Holdings Inc. Equity Drilling Program is a limited partnership offering investors equity interests in residential real estate. Per the Form D filed with the Securities and Exchange Commission (SEC), Texas Energy Holdings Inc. Equity Drilling Program is an unregistered security, also known as a Regulation D offering, which means it comes without the regulatory oversight afforded other securities. Securities law accounts for three exemptions from registrations:
Rule 504 states that companies need not register their securities if they offer and sell no more than $1 million in shares in a 12-month period; they also cannot operate as “blank check companies,” or a companies in early developmental stages without business plans. They generally may not advertise their securities to the public. Nor may purchasers of said securities resell them with registration or obtaining an additional exemption.
Rule 505 permits a company to offer and sell as much as $5 million in shares during a 12-month period; it can sell to accredited investors, and up to 35 general investors; finally, it may not advertise securities.
Rule 506 allows a company to raise an unlimited sum of money from accredited investors; to participate in in general solicitation of, and advertising, to accredited investors; and to obtain an exemption if “bad actors” are involved in the offering.
Regulation D offerings, also known as private placements, provide a valuable source of capital for businesses in the United States, but can be especially risky for investors. The SEC and federal jurisprudence requires that broker-dealer firms who offer a certain security must conduct a “reasonable investigation” into the security and its issuer. The nature of the investigation depends on the nature of the security, the customer, and the issuer. Broker-dealers must take reasonable steps to detect red flags, and additionally to disclose these to customers when recommending the security. They may not recommend Regulation D securities if they are unsuitable for the investors.
If you or someone you know has a complaint regarding investments in Texas Energy Holdings Inc. Equitas Drilling Program, call the securities and investment fraud law firm Fitapelli Kurta at 877-238-4175 for a free consultation. You may be eligible to recoup losses. Fitapelli Kurta accepts every case on contingency: we only get paid if and when you collect money. Time to file your claim may be limited, so we recommend you avoid delay. Call 877-238-4175 now to speak to an attorney for free.