AIM company misleads & scams investors

Sexyscorp66

I'm posting here because I'm an investor in an AIM oil and gas company, who with other investors, believes he has been misled,and basically defrauded by directors who grossly exaggerated and overstated the productive capacity of certain wells, made false promises-and have now declared the latest well 'uncommercial' without even flow testing it as was their published plan.Previously, the execs had publicly stated it 'flows well" and that all thru needed to do was "to turn the taps on".We believe this is a deliberate scam to sell off the well whilst leaving investors with their holdings completely wiped out.On Friday the share price crashed by 60% on this.There have been massive sells before this RNS,and probably insider trading and shorting by those insiders.
Unfortunately the FCA states on its website that it doesn't consider 'complaints by individuals' The nomad who supposedly "regulates" it's own client firm is obviously complicit in all this.
What can we do as shareholders? -is there a legal recourse,in terms of suing the directors for negligent and fraudulent misrepresentation,for misleading investors?
Also,since the FCA seem to want to sweep individual complaints under the carpet,would there legal recourse to sue them and the nomad?
Finally there are any organisations that provide third party funding for such a case,or could we use crowd funding?

spitandpolish

Welcome to the wonderful world of AIM where fortunes are won and lost. I'm sure you'll find a shareholder action group crowdfunding to sue their sorry !!!!!! but don't waste your money, you'll only make the lawyers richer and you poorer.

I've been mislead on AIM and lost £2,000 Circle Oil, as a lesson in investing that was money well spent. I subsequently made much much more by applying proper due diligence on future investments and a key learning was to stay away from the pump and dump investment forums.

Sexyscorp66

I'm sorry for your loss of £2000,but people here bought on the basis of firm statements that turned out to be misleading and fraudulent-they didn't take a stab in the dark at a speculative explorer.life savings have been wiped out,lives ruined and investors defrauded and robbed.
This isn't just 'bad luck' or a random gamble gone wrong,but a systematic deception and fraud,and it's criminal.
The lawyers have stated we do have a strong case and other shareholder groups have succeeded in getting compensation.
Also the regulators have failed to protect investors, ensure corporate givernance; and ignored insider trading.AIM needs string regulation or abolising.
I'm amazed at how complacent r and blithely accepting some people are..this is robbery and fraud.

bowlhead99

A lot of people who invest money in high risk smallcap (including AIM listed) companies - such as speculative non-producing oil companies like Angus Energy (which lost 60% on Friday), in the hope that they strike it rich - end up losing a large proportion of their money.

It is not really the fault of the FCA if you take a shot at investing in a speculative stock as a bit of a gamble and the company spends time and money on planning and setting up testing of a well over a period of a few months or years and then the well turns out not to be commercially viable. I'm not an investor but from a cursory look at the RNS announcements earlier this year it doesn't seem that the bad result at Brockham was impossible, or a complete surprise.

You are right that the FCA don't take complaints from individuals about companies failing to perform as well as you would like. If you were mis-advised to invest in this company, which perhaps turned out to be unsuitable advice take it up with the person who provided you that regulated financial advice. A share of a company on AIM or on the main market is not really a regulated financial product and it is not likely that someone sold you advice to invest into it.

What can we do as shareholders? -is there a legal recourse,in terms of suing the directors for negligent and fraudulent misrepresentation,for misleading investors?

You can try suing anybody and everybody involved but will probably not get very far, especially as you don't have much money to bankroll a case yourself. A number of the board members have changed over the period the company has been running.

Also,since the FCA seem to want to sweep individual complaints under the carpet,would there legal recourse to sue them and the nomad?

You mean sue the FCA and the nomad? Unlikely. You can't show how the FCA has done you harm, and the nomad is adviser to the company and not to you.

Or do you mean sue the indvidual directors and the nomad ? You are on a hiding to nothing. If you can prove that the certain individual directors acted to sell or short their company shares ahead of announcing the work programme did not give good results, you could take that to the FCA or try some sort of civil action.

You say, "There have been massive sells before this RNS,and probably insider trading and shorting by those insiders". Yet the share price has been in the 3-4p range for the last two months, and was also at about 4p from mid-Feb to mid-Mar when they last placed shares at 4p. So when were the 'massive sells' ahead of this particular news release?

Sexyscorp66 wrote: »

directors who grossly exaggerated and overstated the productive capacity of certain wells, made false promises-and have now declared the latest well 'uncommercial' without even flow testing it as was their published plan.

The RNSs from the last few months have talked about a program of testing works to see if they can get commercial flow rates at BRX4Z, and earlier in they year they did validate that hydrocarbons exist and could be obtained in small amounts. The latest announcement is that after sticking the test rig in, they believe it extremely unlikely that they can make it work at commercial flow rates using any conventional approach, and they are not going to use fracking, so won't be taking it forward, and are considering selling it off to someone else. This has happened to oil and gas explorers before, without it being a 'fraud' to sell off the licence or the well at a fraction of its potential value.

bowlhead99

Sexyscorp66 wrote: »

I'm sorry for your loss of £2000,but people here bought on the basis of firm statements that turned out to be misleading and fraudulent-they didn't take a stab in the dark at a speculative explorer.life savings have been wiped out,lives ruined and investors defrauded and robbed.

If 'life savings' have been wiped out it implies that the result of someone's life's savings were invested in this company, correct?

If someone put all (or a large proportion of) their 'life savings' into an investment in shares of one small oil company that is not producing meaningful amounts of oil/gas and not making decent annual profits - and it turns out not to be successful - they have themselves to blame.

That sort of investment *is* speculative and when there are tens of thousands of companies in the world which make profits... and thousands of collective investment funds which spread money over lots of companies - for you to then decide that all of your life savings should go into just one company which doesn't make profits, is surely just a gamble. Pre-profit oil and gas drillers / explorers go bust all the time.

If you mean literally all or most of the savings from their whole life's work have been put into this company and now lost, they are either an entrepreneur closely involved with the company, or they are an idiot. If you don't mean 'life savings' in the conventional sense of the phrase, and instead just mean 'a small portion of the total wealth they had acquired over a lifetime' then we can be sympathetic but people lose money from parts of their portfolio all the time, when they choose to invest in unprofitable companies in the hope that they will one day be profitable.

The lawyers have stated we do have a strong case and other shareholder groups have succeeded in getting compensation.

Stating you have a case is quite different from getting compensation. But "the" lawyers (your lawyers? someone else's lawyers? a lawyer down the pub?) are clearly not confident that either your case is strong enough or that anyone would have the financial capacity to compensate you. Otherwise they would perhaps pursue it on a no win no fee basis using litigation finance.

Sometimes, companies do reach a settlement to compensate shareholders due to fraud or mismanagement of announcements. Tesco and RBS being examples in recent years. However, those two companies are worth billions so can afford millions in compensation. A company worth a few million does not have the resources to do that.

AIM needs string regulation or abolising.

The point of a stock exchange with lighter regulatory compliance requirements than the main market is to allow small companies to access capital markets with lower compliance costs and a reduced admin and governance burden.

I'm amazed at how complacent r and blithely accepting some people are..this is robbery and fraud.

Everyone knows that on AIM there have been some frauds / scams / companies with misleading statements that lasted a while before imploding, and others that were not frauds or scams but still failed. Some companies can give you 2000% profit, others 100% loss.

[Deleted User]

After reading the OPs previous posts, please tell me you haven't invested the £100k from the estate of your parents in this one venture.

Brian65

How much has Woodford put in

AnotherJoe

Sexyscorp66 wrote: »

I'm sorry for your loss of £2000,but people here bought on the basis of firm statements that turned out to be misleading and fraudulent-they didn't take a stab in the dark at a speculative explorer.life savings have been wiped out,lives ruined and investors defrauded and robbed.
This isn't just 'bad luck' or a random gamble gone wrong,but a systematic deception and fraud,and it's criminal.
The lawyers have stated we do have a strong case and other shareholder groups have succeeded in getting compensation.
Also the regulators have failed to protect investors, ensure corporate givernance; and ignored insider trading.AIM needs string regulation or abolising.
I'm amazed at how complacent r and blithely accepting some people are..this is robbery and fraud.

Then take it to the police. Action fraud your first port of call. Obviously you have a lot of evidence of the insider trading and short selling so hopefully they will take that on.
The people who invested their life savings in one single company / enough money that their lives have been ruined, want their heads examining. The fact it's AIM is irrelevant, you may have noticed several FTSE companies going bust or as near to as makes no difference, recently.

Sexyscorp66

Sorry but you're wrong in this one-this isn't some wildcat oil explorer stabbing in the dark Assurances were given-misleading statements that large quantities of oil were in these wells and it was just a matter of 'turning the tap's on' and that 'it flowed well'.
This is negligent misrepresentation of the facts,pure and simple.You are trying to explain away and justify fraud and robbery simoly because it is white collar crime perpetrated by men in expensive suits.
'Light touch' or in reality -zero regulstion-means there is no effective protection fir investors and is an open invitation for companies to trick and defraud investors.The idea that nomads the companies that pay their fees is LUDICROUS.There is a blatant conflict of interest here,a very clear case of moral hazard.
It's beyond belief that this confidence trick,this racket was allowed to continue AFTER the calamity of the credit crunch,where this zero regulation lead to the collapse of banks and ruin for many ordinary people.
I blame incompetent politicians like Brown,Darling and Vincent Cable..not to mention Osborne-who resisted EU regulations that would have strengthened regulations.
Sorry to see that so many of the replies here are obviously from directors of theservice dodgy companies,rather than individual investors.

Thrugelmir

Sexyscorp66 wrote: »

Sorry to see that so many of the replies here are obviously from directors of theservice dodgy companies,rather than individual investors.

Who recommended this company to you? Not one you'd find without some research.

fwor

Were you advised on this investment? That's the critical question. If you were, there may be some chance of redress.

There is no point in complaining about politicians, nor about the rules behind AIM - because those rules were clear before you invested. Neither approach will get you any money back.

Just be aware that at this stage you are vulnerable to being told by legal "experts" that they ~may~ be able to get your money back - when in fact all they want to do is take some more money off you in fees without any chance of success.