Stay up-to-date with the latest developments in securities law through access to both news and all statutes and regulations. Find relevant corporate filings through a searchable EDGAR database. And...
Self-described music visionary Paul Gilman allegedly told investors he was creating soundwave technology to speed up oil production, but spent the money on luxury hotels and Las Vegas casinos instead.
The “Whale Whisperer"—as Gilman calls himself in a documentary about musical experiences with dolphins and whales--fraudulently solicited investments worth $3.3 million in a number of sham companies, the Securities and Exchange Commission said in a June 4 complaint.
Gilman told investors his companies would perfect sports stadium sound systems and use soundwaves to make oil flow faster, according to the complaint in the U.S. District Court for the Northern District of Texas.
“We believe that the evidence will show that Mr. Gilman was developing the sound technology and that he’s continued to develop the sound technology, which is being used successfully,” John Teakell, a Dallas-based attorney representing Gilman, told Bloomberg Law. His client “had no intent to defraud anyone,” Teakell, formerly a trial attorney for the SEC, said.
Gilman allegedly asked for investments in GilmanSound LLC, Oil Migration Group LLC, and WaveTech29 LLC. GilmanSound began as a real business providing services to a few Major League Baseball stadiums, while OMG and WaveTech were both attempts to “revolutionize” an oil and gas industry with which Gilman had no experience, the complaint said. Gilman said he would use investments in OMG and WaveTech to develop and test soundwave technology to lower oil’s viscosity and move it through pipelines more efficiently, the SEC said.
Instead, investor funds went to fancy Vegas hotels, cash withdrawals at casino ATMs, designer clothes, and Ponzi-style repayments to earlier investors, the complaint said. Gilman didn’t solicit investments in a particular company, but told investors they were buying an interest in whichever oil and gas tech firm succeeded first, the SEC said.
Gilman sometimes had investor wire funds meant for one of the oil and gas companies to his GilmanSound bank account instead, the SEC said. Investor funds were allegedly commingled in GilmanSound, WaveTech, and personal bank accounts. The commingling, whichever-succeeds-first investment pitch, and Gilman’s failure to keep appropriate records all make it harder for the SEC to separate the investments, the agency said.
The case is SEC v. Gilman , N.D. Tex., No. 3:18-cv-01421, complaint filed 6/4/18 .
To contact the reporter on this story: Jennifer Bennett in Washington at email@example.com
To contact the editor responsible for this story: Seth Stern at firstname.lastname@example.org
Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)