US firm's CEO 'swindled investors out of $108.5m'
TEXAS oilman Chris Faulkner built a high-profile public persona, raised millions for his oil and gas ventures and courted politicians.
But the US Securities and Exchange Commission (SEC) has alleged that he cheated investors out of US$80 million (S$108.5 million) to fund a jet-setting lifestyle.
Last week, it filed a lawsuit that alleges a stunning failure of corporate governance at Faulkner's Dallas-based Breitling Energy and other companies he helped to create.
Based upon inflated estimates of the oil and gas that his companies controlled, the charges said, Faulkner lured hundreds of United States investors to back his firms.
Their investments were largely used to pay personal expenses for Faulkner, his associates, family and friends, the SEC alleged.
Faulkner, 39, faced a spate of lawsuits in the early 2000s in connection with his previous web-hosting business.
He then turned his attention to energy drilling during the US shale boom in the last decade.
But after raising funds, he did little drilling and racked up millions in credit-card charges, the SEC said.
The lawsuit charged him, three related companies and seven other people for activities starting in 2011.
Faulkner used the investors' cash on extravagances, including lavish meals, chartered planes, jewellery, strip clubs and female escort services, according to the SEC complaint.
However, Larry Friedman, a lawyer for Breitling and Faulkner, countered that the SEC allegations are "inaccurate and untrue".