Failure to Get A License: Uh, That’ll Be $22 Million

McClatchy Washington BureauMay 15, 2014 

— It's not a good idea to sell securities without a license.

Just ask Behrooz Sarafraz, whom it’s gonna cost a few bucks -- well, more than $22 million actually.

Sarafraz has agreed to relinquish that fortune to settle charges that he peddled millions of dollars in oil-and-gas investments over an eight-year period without registering as a broker-dealer or an associate of a broker-dealer, as required by a federal law passed, let’s see ... EIGHTY YEARS AGO.

The Securities and Exchange Commission filed suit accusing the Tiburon, Ca.-based Sarafraz with acting as the primary salesman on behalf of TVC Opus I Drilling Program LP and Tri-Valley Corp., which were based in Bakersfield, Ca., even though he never registered with the agency.

Those two companies raised more than $140 million from 2002 to 2010 for their oil- and gas-drilling venture. In return for selling partnership interests in Opus and securities of Tri-Valley, Sarafraz got seven to 17 percent in commissions for his sales and those of a network he assembled.

Sarafraz wound up with $16.4 million.

Without admitting or denying the charges, he agreed in a proposed court settlement to disgorge all of those commissions, to pay $6 million in prejudgment interest and a $50,000 penalty.

The deal calls for a judge to also permanently enjoin him from ever doing it again.

Email: ggordon@mcclatchydc.com; Twitter: @greggordon2.

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