Sunday, July 18, 2010

Is it Heartland Energy Development Corporation, or is Swan Energy Inc. A Real Company?

As a native of Colorado and one that is simply interested in securities like stocks and bonds, I take a natural interest to all of the fraud that has been going on here locally. Everything from the small time Ponzi Schemer to the flat out fraudster. One company that peaked my interest was Heartland Energy Development Corporation out of Englewood, Colorado.

Denver used to be one of the biggest and most flourishing environments for penny stockbrokers or "small cap specialists" back in the mid to late 1980's. Denver has been the home of many scandals from Silverado to Blinder Robinson. So it would seem that there is always something going on in the small town of Denver, Colorado.

In 2007 The Alabama Securities Commission had issued a cease and desist order to Heartland Energy Development Corporation located at the time at 9780 Mount Pyramid Court, Suite 200, Englewood, Colorado 80112. Some of the respondents named in the cease and desist order for Heartland Energy Development Corporation were John Schiffner, Brandon Davis and Charles Reed Cagle.

According to the order, the Alabama Securities Commission states that a representative of Heartland Energy Development Corporation engaged in the offer of and/or sale of unregistered securities in the Starr County Kennard Joint Venture to a resident in Alabama. Further, it was John Schiffner who made a general solicitation or cold call to the Alabama Resident. The representative, John Schiffner mailed documents to the resident which represented Brandon Davis as the CEO of Heartland Energy Development Corporation at the time.

The offering that was mailed describes the investment offered as participation in units of interest in a joint venture which was to be formed under Texas partnership law to engage primatily in the business of exploration, production from, and operation of an oil and gas well in Starr County, Texas. The objectives of the investment was to acquire the acreage for the Wellbore and conduct operations to drill, test and if appropriate complete the prospect well. The investor in this case would be provided cash distributions from operations.

The respondents to the order, namely John Schiffner were neither registered nor exempt from registration with Securities Exhange Commission with the state of Alabama. According to the order, the units of interest are defined as a security and John Schiffner needed to be registered in order to offer these units to the public.

So basically, John Schiffner and the other officers listed above were issued a cease and desist order, and from the looks of it, that was all. What happened after that? Did anyone pursue them any further?

The entire point of this blog is to find answers to some of these questions. Heartland Energy Development Corporation does not seem to exist any longer. I have contacted Heartland Energy Development Corporation at their old phone number (303) 768-9440. Today the phones are answered "Swan Energy Inc". Who is Swan Energy Inc.? Is it just a cover up company that would clean Heartland Energy Development Corporation's scarred background with the SEC? This is what I hope to find out in future posts.

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