Court To Hear Appeal By Texas Oilman
WASHINGTON (AP) _ The Supreme Court today agreed to hear an appeal by a Texas oilman who says he should not have to bear full financial liability for selling unregistered oil and gas leases.
The court said it will determine whether federal securities law requires that a promoter of the deal who also bought securities himself may be forced to share liability.
The appeal was filed by Billy ″B.J.″ Pinter, head of Black Gold Oil Co., who sold oil and gas rights in Texas and Oklahoma to a group of investors in 1981.
Maurice Dahl, a California real estate broker, was instrumental in putting the deal together. Dahl was convinced the leases would be lucrative and promoted their sale to his friends and family members.
When the leases proved worthless, the investors - including Dahl - sued Pinter.
The 5th U.S. Circuit Court of Appeals ruled a year ago that Pinter violated federal law by failing to register the securities. The appeals court upheld a federal judge’s ruling that Pinter must reimburse the investors for their losses plus interest.
Pinter said that Dahl, because he promoted the investment, is himself a ″seller″ of securities who should be forced to share the cost of reimbursement.
But the 5th Circuit court, noting that Dahl did not receive a commission for promoting the sale of the leases, said he was more a buyer than a seller. The appeals court said there is no evidence that Dahl was aware the failure to register the securities was illegal.
″We believe that a rule imposing liability (without fault or knowledge) on friends and family members who give one another gratuitous advice on investment matters unreasonably interferes with well established patterns of social discourse,″ the appeals court said.
The case is Pinter vs. Dahl, 86-805.