SEC v. ROCKWELL ENERGY OF TEXAS, LLC; ROCKWELL ENERGY MANAGEMENT, LLC; GREGORY S. SHINDLER; BRADLEY M. JAMES; W. TODD SMITH; STUART E. RAWITT, et al., No. 4:09-cv-4080, Southern District of Texas (Dec. 23, 2009) — Complaint

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
________________________________________________
SECURITIES AND EXCHANGE COMMISSION, §
        §
Plaintiff,                                    §
        §
v.   §
                                    §
                        §
ROCKWELL ENERGY OF TEXAS, LLC  §
ROCKWELL ENERGY MANAGEMENT, LLC  § Civil Action No.: 4:09-cv-4080
GREGORY S. SHINDLER,      §
BRADLEY            M.            JAMES,                                                            §
W. TODD SMITH,      §
STUART            E.            RAWITT,            and                                                            §
BRIAN            W.            WALSH                                                                        §
        §
        §
        §
    Defendants.   §
________________________________________________§

COMPLAINT

Plaintiff Securities and Exchange Commission alleges:

SUMMARY

1. From March 2008 through February 2009, Defendant Greg Shindler (“Shindler”),
through funds using variations of the name “Rockwell Energy,” created and managed two
fraudulent oil-and-gas offerings.  Defendant Bradley James (“James”) co-created the second
Rockwell Energy fund and co-managed it for a period of several months.  Together, the two
offerings raised $5.5 million from 139 investors.  Neither fund was registered with the
Commission or otherwise exempt from registration.
2. In the offering documents, Shindler and James made material misrepresentations
and omitted material facts concerning the profitability of the funds, the nature and extent of the

investments that the funds had made or intended to make, and the use of investor proceeds.
Among other misrepresentations, the offering materials claimed that the funds had existing and
prospective investments in oil-and-gas properties, and that investors would immediately start
earning and receiving returns of 1.5% per month from production revenue.  In reality, the first
fund owned no oil-and-gas properties when it began accepting investors, and the second fund has
never acquired any producing oil-and-gas properties.
3. The oil-and-gas properties that the funds have invested in never generated
sufficient production revenue to cover distribution payments to investors at the 1.5% monthly
rate, yet Shindler made the monthly income distributions at the targeted rate for a number of
months.  To do so, he relied in part on “investment” income other than production revenue,
including payments from sham transactions designed specifically to artificially create the
promised returns.  Shindler also converted some investor funds to personal and other improper
uses, and some of the “returns” he paid investors were made from the principal payments of
other investors (i.e., Ponzi payments).
4. The Commission, in the interest of protecting the public from such fraudulent
activities, brings this civil securities law enforcement action seeking orders enjoining defendants
from further violations of the antifraud and/or registration provisions of the federal securities
laws, requiring disgorgement of ill-gotten gains, and awarding prejudgment interest and civil
monetary penalties as allowed by law.
JURISDICTION AND VENUE

5. The investments offered and sold by defendants are “securities” under Section
2(1) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77b] and Section 3(a)(10) of
the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78c].
SEC v. Rockwell Energy of Texas, LLC, et al.   Page 2 of 17
Complaint

6. The Commission brings this action under Section 20(b) of the Securities Act [15
U.S.C. § 77t(b)] and Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)] to preliminarily
and/or permanently enjoin defendants from future violations of the federal securities laws.
7. This Court has jurisdiction over this action under Section 22(a) of the Securities
Act [15 U.S.C. §77u(a)] and Section 27 of the Exchange Act  [15 U.S.C. §§78u(e) and 78aa].
8. Defendants have, directly and indirectly, made use of the means or
instrumentalities of interstate commerce and/or the mails in connection with the transactions
described in this Complaint.
9. Venue is proper in this Court under Section 22(a) of the Securities Act [15 U.S.C.
§77u(a)] and Section 27 of the Exchange Act [15 U.S.C. §§78u(e) and 78aa] because certain of
the acts and transactions described herein took place in Houston, Texas and elsewhere in this
district and division, and because defendants Gregory Shindler and Bradley James reside in this
district and division.
DEFENDANTS

10. Rockwell Energy of Texas, LLC (“RET”) is a Texas limited liability company,
with a principal place of business in Houston.  It is the general partner (“GP”) of Rockwell
Energy’s first fund – Rockwell Energy Production and Acquisition Fund, LP. (“Fund I”).
Defendant Gregory Shindler controls RET as its sole officer.
11. Rockwell Energy Management, LLC (“REM”) is a Texas limited liability
company, with a principal place of business in Houston, Texas.  It is the GP of Rockwell
Energy’s second fund – Rockwell Energy Acquisition Fund, LP (“Fund II”).  Shindler owns the
managing member of REM.  James, Fund II’s co-founder, formerly indirectly held a 25%
interest in REM.  James relinquished his interests in REM and withdrew from Fund II a few
SEC v. Rockwell Energy of Texas, LLC, et al.   Page 3 of 17
Complaint

months after the fund starting accepting investors.  Prior to relinquishing his interest in REM,
James served with Shindler as general partner of Fund II.
12. Gregory S. Shindler, age 45, is a resident of Houston, Texas.  He is the founder
of Fund I and co-founder of Fund II.  He controls the GPs of both funds.
13. Bradley M. James, age 43, is a resident of Houston, Texas.  He, along with
Shindler, co-founded Fund II.  Until December 2008, he indirectly owned 25% of REM, the GP
for Fund II.  The offering materials for Fund II identify James and Shindler, as the fund’s
“operators.”
14. W. Todd Smith (“Smith”), age 41, is a resident of Corona, California.  Between
October 2008 and January 2009, Smith promoted and sold interests in the Rockwell Energy
offerings, and he received, directly or indirectly, approximately $990,000 in sales related fees.
Smith does not hold a securities license.
15. Stuart E. Rawitt (“Rawitt”), age 42, is a resident of Woodland Hills, California.
Between September 2008 and January 2009, he promoted and sold interests in the Rockwell
Energy offerings. Rawitt received, directly or indirectly, approximately $275,000 in
commissions from the sale of interests in Fund II.  Rawitt does not hold a securities license.
16. Brian W. Walsh (“Walsh”), age 55, is a resident of San Diego, California.
Between April 2008 and January 2009, received, directly or indirectly, approximately $355,000
in so-called “referral fees” for sales made by people he enlisted to solicit investments on behalf
of the Rockwell Energy funds.  Walsh does not hold a securities license.
FACTS

17. Shindler formed Fund I and, together with James, Fund II (collectively, the
“Rockwell Energy” funds) in April 2008 and September 2008, respectively.  Shindler structured
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the Rockwell Energy funds as limited partnerships, each with 35 LP interests at $100,000 per
interest.  Shindler raised the full $3.5 million from investors in Fund I, and, together with James,
approximately $2.0 million from investors in Fund II.  Defendants offered and sold interests in
the Rockwell Energy funds to the public through general solicitations of interest.
Fund I
18. According to Shindler, he created Fund I around a technology that allegedly
improves the productivity of marginal gas wells.  The PPM refers to the technology as a “green”
technology and calls it a Passive Dehydration System or PDS.  The device purportedly enhances
production by removing water from unprocessed natural gas in a manner that is more efficient
than traditional methods.
19. According to offering materials, PDS technology “results in an immediate
increase in production of 40%,” and the “production and revenue increase . . . mitigat[es] risk
completely.”  The statement that the device “mitigates” risk “completely” is either misleading or
patently false.
20. The private placement memorandum (“PPM”) and promotional materials for
Fund I style the offering as an income investment that pays investors monthly distributions
“secured” by existing and to-be-acquired gas production.
21. The PPM falsely states that RET owned working interests in two producing gas
wells, and that Fund I intended to purchase those interests and outfit the wells with PDS
technology.  In reality, in June 2008, at the time these representations were made to investors,
RET did not own any interests in either well, and only one of the two was producing.  Fund I
never acquired any interest in the non-producing well because, according to Shindler, it turned
out to be a dry hole.
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22. In addition, the offering materials include a “case study” that describes the
purported benefit of PDS technology based on anticipated production figures for another well,
and claims that the well is “company owned.”  In reality, neither RET nor Fund I owned the
well.
23. The offering materials also falsely claim that Fund I “currently owns” an
“inventory of 20 wells,” with which the fund “will be able to increase its monthly distributions”
as it adds new wells from its inventory to the program.  In fact, those interests were not owned
by Fund I; rather, they were owned by a former business partner of Shindler.  Fund I never
acquired any interests in those wells.
24. Fund I instead acquired well interests from others with whom Shindler had had
prior business dealings, including James.  By August 2008, Fund I had acquired working
interests at four different gas well sites.  Between the four well sites, Fund I owns fractional
interests in 14 different gas wells.  RET has deployed only one PDS unit, which services four
wells, all at the same site.
25. In the Fund I offering materials, Shindler told investors that the fund “will payout
18% annually which is paid out 1.5% monthly, from the date of investment,” and that returns
would climb as high as 30% “as additional production is brought online.”  Shindler never
disclosed to investors that there existed no reasonable basis on which he could project such
returns.
26. As promised, Shindler started paying investors 1.5% monthly returns soon after
they invested in Fund I.  The gas well interests that Fund I owned, however, never generated
sufficient production revenue to support such high returns.
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27. At full subscription, the fund needed $52,500 in monthly production revenue to
meet its distribution commitments.  Fund I was fully subscribed by October 2008, but was
earning, on average, only about $20,000 in monthly production revenue.  Fund I never earned
more than $42,675 in production revenue in a single month, and, since September 2008, has not
earned more than $18,000 in a single month.
28. Nevertheless, Shindler sent investors monthly distribution payments at the
promised rate of return up until December 2008, at which time he cut the payments to roughly
1% monthly.  Shindler told investors at the time that the drop was due to price declines in the
market for natural gas.  In reality, Fund I’s assets never performed well enough to support 1%
monthly returns, let alone the 1.5% returns originally promised.
29. In an apparent effort to bolster the fund’s returns, Shindler caused Fund I to make
two “investments” that were unrelated to interests in oil-and-gas properties, and which were not
disclosed to investors as part of the fund’s investment strategy.
30. Shindler used investor funds to make a loan of $130,000 to an entity co-owned by
James’ brother.  The entity agreed to pay RET a monthly interest payment of $3,800, which
amounts to an annual interest rate of 35%.
31. Shindler designed the transaction to generate sham revenue with which to service
the monthly income payments Fund I promised its investors.    In documents Shindler prepared
for and provided to the Commission, he falsely categorized the interest payments from the loan
as production revenue.
32. Shindler also put $100,000 of investor money in a commodities hedge fund that,
from September 2008 to January 2009, purported to generate monthly returns to Fund I ranging
from 4.5% to 15%.  Shindler never disclosed to investors, through the PPM or otherwise, that
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returns on their investments would be generated through loans to third parties, or that Fund I
would invest in anything other than oil-and-gas properties.
33. Shindler converted investor proceeds to improper personal uses as well. Under the
PPM for Fund I, the general partner is entitled to management fees equal to 10% of the gross
monthly revenue generated by the fund.  As of January 2009, Fund I had received roughly
$128,000 in production revenue, of which Shindler would be entitled to $12,800 in management
fees.  Shindler, however, paid himself more than $25,000, and spent another $15,000 on travel,
meals, and entertainment.
34. In addition, Shindler made some questionable and possibly improper payments
from investor funds on deposit with Fund I.  He caused Fund I to pay: 1) $60,000 to his mother,
his wife, and his father for alleged “administrative” services; 2) $100,000 to a company Shindler
owns for which Fund I received no known benefit; and 3) over $45,000 to defendant James for
alleged “consulting” services.
35. In addition, Shindler used $20,000 of investor proceeds from RET’s deposit
account to fund distribution payments to investors.  In so doing, he paid investors “returns” using
their own money instead of production revenue – i.e., Ponzi payments.
36. As of July 2009, RET had dissipated all but approximately $12,000 of the
investor funds held in Fund I.  At the request of the Commission’s staff, Shindler agreed to place
these remaining funds in escrow.
Fund II
37. Fund II purported to rely on the same investment strategy as Fund I – acquiring
gas wells and equipping them with PDS units to make them more productive – and the offering
materials for the two funds contain similar representations.
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38. Describing the fund’s “investment objective,” the PPM for Fund II falesly states
that it “will open with two wells in the inventory of target acquisitions” and that “this will ensure
the Fund is profitable and has a positive cash flow from inception.”  The PPM for Fund II also
identifies, as a separate investment purpose, purchasing oil-and-gas leases, either to drill wells
for the fund or to resell to other oil companies.
39. Both Shindler and James reviewed and approved the offering materials that REM
prepared for investors in Fund II.  Those materials offered investors the same returns Shindler
touted to investors in Fund I – 18% annual returns, paid out in increments of 1.5% per month.
Shindler and James never disclosed to investors that there existed no reasonable basis on which
they could project such returns.
40. In fact, Fund II never invested in any gas wells or sought to benefit from PDS
technology.  Rather, the only investment it ever made was in a structured transaction that
Shindler engineered to generate sham revenue with which to pay Fund II investors.
41. Through  the  structured  transaction,  Shindler,  using  James  as  an  intermediary,
arranged for Fund II to receive monthly payments from a business associate of James.  In order
to enter into the transaction, and personally profit from it, James resigned from Fund II.
42. Pursuant  to  the  transaction,  James  entered  into  an  agreement  with  TOEI  2008-3
LLC (“TOEI”) – an entity controlled by a business associate – under which James agreed to pay
TOEI  $500,000  for  the  purported  purpose  of  acquiring  oil-and-gas  leases  and  royalty  interests.
James simultaneously assigned 75% of his interest in the agreement to Fund II, and reserved to
himself  the  remaining  25%.    Fund  II  made  the  $500,000  payment  directly  to  TOEI,  with  no
financial contribution by James.  TOEI used $375,000 of the payment to purchase a 1,500 acre
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lease.  Under the terms of the agreement and assignment, Fund II, TOEI, and James would split
the profits from any eventual sale of the lease.
43. In  addition,  under  the  terms  of  the  agreement,  TOEI  agreed  to  make  an  initial
payment  back  to  James  of  $12,500  followed  by  9  monthly  payments  of  $15,000  each.    James
assigned  these  payments  to  Fund  II,  and  Shindler  used  them  to  make  distributions  to  Fund  II
investors.
44. In communications with investors, Shindler falsely characterized this arrangement
as TOEI’s agreement to “pay [Fund II] 18% per year for nine months . . . in consideration for the
[$500,000]  investment.”    Under  the  terms  of  the  agreement,  however,  TOEI  was  ultimately
entitled to recover back from Fund II the full $147,500 in payments.  The refund is to come from
the proceeds of the sale of the oil-and-gas lease, and is to be paid to TOEI before any returns are
paid to Fund II.   The $147,500 in payments from TOEI to Fund II is, therefore, not a return on
investment, but rather a loan transaction.
45. The sole purpose of the payments from TOEI was to fund income distributions to
investors.    With  James’  assistance,  Shindler  structured  the  transaction  specifically  to  generate
payment amounts that met or exceeded 1.5% monthly returns on the amount under investment by
Fund  II  at  the  time.    James  terminated  the  transaction  with  TOEI  after  the  Commission’s  staff
questioned Shindler about it.
46. In  addition  to  entering  into  the  fraudulent  transaction  with  TOEI,  Shindler  made
some questionable and possibly improper payments from investor funds on deposit with Fund II.
For example, Shindler paid almost $60,000 to a company he owns for which Fund II received no
known  benefit.    Shindler  paid  more  than  $56,000  to  his  mother  for  alleged  “administrative”
services.    In  addition,  he  paid  $14,000  to  a  plastic  surgeon,  $3,500  to  a  ski  resort  in  Vail,
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Colorado, $6,500 to settle a debt owed by Fund I, and $12,000 for five LCD televisions, and TV
and satellite installation.
47. As  of  July  2009,  REM  had  dissipated  all  but  approximately  $350,000  of  the
investor  funds  held  in  Fund  II.    At  the  request  of  the  Commission’s  staff,  Shindler  agreed  to
place these remaining funds in escrow.
Rockwell Energy Salesmen
48. Shindler  and  James  also  falsely  told  investors  that  Rockwell  Energy  would  pay
sales  commissions  only  to  registered  broker-dealers,  and  that  no  more  than  25.5%  of  investor
proceeds  would  go  to  pay  sales  commissions  or  other  promotional  fees.    Rockwell  Energy
actually used only unlicensed salesmen to solicit investors, and Shindler caused Fund I and Fund
II to pay them fees as high as 40%.
49. Of the $6 million raised from investors, Shindler caused the funds to pay roughly
$2.3  million  in  commissions  or  other  sales-related  fees  to  the  individuals  who  sold  interests  in
the Rockwell Energy offerings.  In most, if not all, cases, the salesmen “cold called” people from
lead lists of purportedly accredited investors.
50. Defendant Todd Smith made almost $1 million in sales-related fees through direct
solicitations to potential investors.
51. Defendant  Stuart  Rawitt  made  approximately  $275,000,  in  sales-related  fees
through direct solicitations to potential investors.
52. Defendant Brian Walsh, who received approximately $355,000 in “referral fees,”
claims  not  to  have  solicited  investors  directly,  but  to  have  arranged,  through  a  company  he
created, for two or more individuals to solicit investors on behalf of the Rockwell Energy funds.
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Shindler paid Walsh’s company sales commissions directly.  Walsh kept a majority of the fees,
and passed the remainder on to the salesmen.
53. Walsh  also  was  instrumental  in  helping  Shindler  to  get  Rockwell  Energy  off  the
ground.  Shindler created Fund I as a result of one or more meetings he had with Walsh.  Walsh
held himself out to Shindler as a “fund raiser” from  California  who  had  a  database  of  “clients”
from  whom  to  solicit  investments.    Walsh  gave  Shindler  feedback  on  how  to  put  together  the
offering  materials,  and  he  introduced  Shindler  to  Smith,  the  salesman  who,  of  all  the  Rockwell
Energy salesmen, raised the most money from investors.
FIRST CLAIM

AS TO DEFENDANTS RET, REM, SHINDLER AND JAMES

Violation of Section 10(b) of the Exchange Act and Rule 10-5

54. Plaintiff Commission repeats and realleges paragraphs 1 through 53 of this
Complaint and incorporated herein by reference as if set forth verbatim.
55. Defendants RET, REM, Shindler, and James, directly or indirectly, singly or in
concert with others, in connection with the purchase and sale of securities, by use of the means
and instrumentalities of interstate commerce and by use of the mails have:  (a) employed devices,
schemes and artifices to defraud;  (b) made untrue statements of material facts and omitted to
state material facts necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading; and (c) engaged in acts, practices and courses of
business which operate as a fraud and deceit upon purchasers, prospective purchasers and other
persons.
56. As a part of and in furtherance of their scheme, defendants RET, REM, Shindler,
and James, directly and indirectly, prepared, disseminated or used contracts, written offering
documents, promotional materials, investor and other correspondence, and oral presentations,
SEC v. Rockwell Energy of Texas, LLC, et al.   Page 12 of 17
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which contained untrue statements of material facts and misrepresentations of material facts, and
which omitted to state material facts necessary in order to make the statements made, in light of
the circumstances under which they were made, not misleading, including, but not limited to,
those set forth in Paragraphs 1 through 53, above.
57. Defendants RET, REM, Shindler, and James made the referenced
misrepresentations and omissions knowingly or with severe and reckless disregard of the truth.
58. For these reasons, defendants RET, REM, Shindler, and James have violated and,
unless enjoined, will continue to violate the provisions of Section 10(b) of the Exchange Act [15
U.S.C. § 78j(b)] and Exchange Act Rule 10b-5 [17 C.F.R. § 240.10b-5].
SECOND CLAIM

AS TO DEFENDANTS RET, REM, SHINDLER AND JAMES

Violations of Section 17(a) of the Securities Act

59. Plaintiff Commission repeats and realleges paragraphs 1 through 53 of this
Complaint and incorporated herein by reference as if set forth verbatim.
60. Defendants RET, REM, Shindler, and James, directly or indirectly, singly, in
concert with others, in the offer and sale of securities, by use of the means and instruments of
transportation and communication in interstate commerce and by use of the mails, have:  (a)
employed devices, schemes or artifices to defraud;  (b) obtained money or property by means of
untrue statements of material fact or omissions to state material facts necessary in order to make
the statements made, in light of the circumstances under which they were made, not misleading;
and (c) engaged in transactions, practices or courses of business which operate or would operate
as a fraud or deceit.
61. As part of and in furtherance of this scheme, defendants RET, REM, Shindler,
and James, directly and indirectly, prepared, disseminated or used contracts, written offering
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documents, promotional materials, investor and other correspondence, and oral presentations,
which contained untrue statements of material fact and which omitted to state material facts
necessary in order to make the statements made, in light of the circumstances under which they
were made, not misleading, including, but not limited to, those statements and omissions set
forth in paragraph 1 through 53 above.
62. Defendants RET, REM, Shindler, and James made the referenced
misrepresentations and omissions knowingly or with severe and reckless disregard of the truth.
63. For these reasons, defendants RET, REM, Shindler, and James have violated and,
unless enjoined, will continue to violate Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].
THIRD CLAIM

AS TO ALL DEFENDANTS

Violations of Section 5(a) and 5(c) of the Securities Act

64. Plaintiff Commission repeats and realleges paragraphs 1 through 53 of this
Complaint and incorporated herein by reference as if set forth verbatim.
65. Defendants, directly or indirectly, singly and in concert with others, have been
offering to sell, selling and delivering after sale, certain securities, and have been, directly and
indirectly: (a) making use of the means and instruments of transportation and communication in
interstate commerce and of the mails to sell securities, through the use of written contracts,
offering documents and otherwise; (b) carrying and causing to be carried through the mails and
in interstate commerce by the means and instruments of transportation, such securities for the
purpose of sale and for delivery after sale; and (c) making use of the means or instruments of
transportation and communication in interstate commerce and of the mails to offer to sell such
securities.
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66. As described in this Complaint, defendants offered and sold interests in one or
both of the Rockwell Energy funds to the public through general solicitations of interest.  No
registration statement has been filed with the Commission or is otherwise in effect with respect
to these securities.
67. Defendant Shindler, in the case of both Rockwell Energy funds, and defendant
James, in the case of Fund II, offered and sold securities as control persons of the issuers who
prepared and/or approved the various offering documents, and who approved the hiring of the
salesmen to sell the offerings.
68. Defendant Walsh was a necessary participant in the distribution of Rockwell
Energy securities, and a substantial factor in the distribution’s success.
69. For these reasons, defendants have violated and, unless enjoined, will continue to
violate Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a) and 77e(c)].
FOURTH CLAIM

AS TO DEFENDANTS SMITH, RAWITT, AND WALSH

Violations of Section 15(a)(1) Of The Exchange Act

70. Plaintiff Commission repeats and realleges paragraphs 1 through 53 of this
Complaint and incorporated herein by reference as if set forth verbatim.
71. At the times alleged in this Complaint, defendants Smith, Rawitt, and Walsh have
been in the business of effecting transactions in securities for the accounts of others.
72. Defendants Smith, Rawitt, and Walsh made use of the mails and of the means and
instrumentalities of interstate commerce to effect transactions in and to induce or attempt to
induce the purchase of securities.
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73. At the times alleged in this Complaint, defendants Smith, Rawitt, and Walsh were
not registered with the Commission as a broker or dealer, as required by Section 15(a) of the
Exchange Act [15 U.S.C. § 78o(a)].
74. By reason of the foregoing, defendants Smith, Rawitt, and Walsh have violated
and, unless enjoined, will continue to violate Section 15(a)(1) of the Exchange Act [15 U.S.C.
§78o(a)(1)].
RELIEF REQUESTED

 Plaintiff respectfully requests that this Court:
I.
 Permanently enjoin defendants RET, REM, Shindler, and James from violating Sections
5(a), 5(c) and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5
thereunder.
II.
 Permanently enjoin defendants Smith, Rawitt, and Walsh from violating Sections 5(a)
and 5(c) of the Securities Act and Section 15(a)(1) of the Exchange Act.
III.
 Order the defendants to disgorge an amount equal to the funds and benefits they obtained
illegally as a result of the violations alleged herein, and to pay prejudgment interest on those
funds and benefits.
IV.
 Order civil penalties against the defendants pursuant to Section 20(d) of the Securities
Act [15 U.S.C. § 77t(d)], and Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)], for their
securities law violations.
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SEC v. Rockwell Energy of Texas, LLC, et al.   Page 17 of 17
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V.
 Order any additional relief that this Court may deem just and proper.

Dated:  December 22, 2009      Respectfully submitted,
s/Jennifer D. Brandt

                                                                        JENNIFER            D.            BRANDT
      Attorney-in-charge
                                                                        Texas            Bar            No.            00796242
      S.D. Texas Bar No. 37943
      JASON C. RODGERS
                                                                        Texas            Bar            No.            24005540
                                                                        S.D.            Texas            Bar            No.            Pending            Renewal
                                                                        U.S.            Securities            and            Exchange            Commission
      Burnett Plaza, Suite 1900
                                                                        801            Cherry            Street,            Unit            #18
Fort Worth, TX 76102-6882
(817) 978-6442
  (817) 978-4927 (facsimile)
                                                                                                                        [email protected]

COUNSEL FOR PLAINTIFF SECURITIES AND
EXCHANGE COMMISSION

IN THE UNITED STATES DISTRICT COURT 
FOR THE SOUTHERN DISTRICT OF TEXAS 

HOUSTON DIVISION 
________________________________________________ 
SECURITIES AND EXCHANGE COMMISSION, § 
        § 

Plaintiff,   § 
        § 
v.   §        
   §  

  §  
ROCKWELL ENERGY OF TEXAS, LLC  § 
ROCKWELL ENERGY MANAGEMENT, LLC  § Civil Action No.: 4:09-cv-4080 
GREGORY S. SHINDLER,      § 
BRADLEY M. JAMES,     § 
W. TODD SMITH,      § 
STUART E. RAWITT, and     § 
BRIAN W. WALSH      § 
        § 
        § 
        § 
    Defendants.   § 
________________________________________________§ 
 

COMPLAINT 

Plaintiff Securities and Exchange Commission alleges: 
 

SUMMARY 
  

1. From March 2008 through February 2009, Defendant Greg Shindler (“Shindler”), 

through funds using variations of the name “Rockwell Energy,” created and managed two 

fraudulent oil-and-gas offerings.  Defendant Bradley James (“James”) co-created the second 

Rockwell Energy fund and co-managed it for a period of several months.  Together, the two 

offerings raised $5.5 million from 139 investors.  Neither fund was registered with the 

Commission or otherwise exempt from registration.      

2. In the offering documents, Shindler and James made material misrepresentations 

and omitted material facts concerning the profitability of the funds, the nature and extent of the 

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investments that the funds had made or intended to make, and the use of investor proceeds.  

Among other misrepresentations, the offering materials claimed that the funds had existing and 

prospective investments in oil-and-gas properties, and that investors would immediately start 

earning and receiving returns of 1.5% per month from production revenue.  In reality, the first 

fund owned no oil-and-gas properties when it began accepting investors, and the second fund has 

never acquired any producing oil-and-gas properties.   

3. The oil-and-gas properties that the funds have invested in never generated 

sufficient production revenue to cover distribution payments to investors at the 1.5% monthly 

rate, yet Shindler made the monthly income distributions at the targeted rate for a number of 

months.  To do so, he relied in part on “investment” income other than production revenue, 

including payments from sham transactions designed specifically to artificially create the 

promised returns.  Shindler also converted some investor funds to personal and other improper 

uses, and some of the “returns” he paid investors were made from the principal payments of 

other investors (i.e., Ponzi payments).   

4. The Commission, in the interest of protecting the public from such fraudulent 

activities, brings this civil securities law enforcement action seeking orders enjoining defendants 

from further violations of the antifraud and/or registration provisions of the federal securities 

laws, requiring disgorgement of ill-gotten gains, and awarding prejudgment interest and civil 

monetary penalties as allowed by law.      

JURISDICTION AND VENUE 

5. The investments offered and sold by defendants are “securities” under Section 

2(1) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77b] and Section 3(a)(10) of 

the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78c]. 

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6. The Commission brings this action under Section 20(b) of the Securities Act [15 

U.S.C. § 77t(b)] and Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)] to preliminarily 

and/or permanently enjoin defendants from future violations of the federal securities laws.  

7. This Court has jurisdiction over this action under Section 22(a) of the Securities 

Act [15 U.S.C. §77u(a)] and Section 27 of the Exchange Act  [15 U.S.C. §§78u(e) and 78aa]. 

8. Defendants have, directly and indirectly, made use of the means or 

instrumentalities of interstate commerce and/or the mails in connection with the transactions 

described in this Complaint. 

9. Venue is proper in this Court under Section 22(a) of the Securities Act [15 U.S.C. 

§77u(a)] and Section 27 of the Exchange Act [15 U.S.C. §§78u(e) and 78aa] because certain of 

the acts and transactions described herein took place in Houston, Texas and elsewhere in this 

district and division, and because defendants Gregory Shindler and Bradley James reside in this 

district and division. 

DEFENDANTS 

10. Rockwell Energy of Texas, LLC (“RET”) is a Texas limited liability company, 

with a principal place of business in Houston.  It is the general partner (“GP”) of Rockwell 

Energy’s first fund – Rockwell Energy Production and Acquisition Fund, LP. (“Fund I”).  

Defendant Gregory Shindler controls RET as its sole officer.   

11. Rockwell Energy Management, LLC (“REM”) is a Texas limited liability 

company, with a principal place of business in Houston, Texas.  It is the GP of Rockwell 

Energy’s second fund – Rockwell Energy Acquisition Fund, LP (“Fund II”).  Shindler owns the 

managing member of REM.  James, Fund II’s co-founder, formerly indirectly held a 25% 

interest in REM.  James relinquished his interests in REM and withdrew from Fund II a few 

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months after the fund starting accepting investors.  Prior to relinquishing his interest in REM, 

James served with Shindler as general partner of Fund II.   

12. Gregory S. Shindler, age 45, is a resident of Houston, Texas.  He is the founder 

of Fund I and co-founder of Fund II.  He controls the GPs of both funds.   

13. Bradley M. James, age 43, is a resident of Houston, Texas.  He, along with 

Shindler, co-founded Fund II.  Until December 2008, he indirectly owned 25% of REM, the GP 

for Fund II.  The offering materials for Fund II identify James and Shindler, as the fund’s 

“operators.”      

14. W. Todd Smith (“Smith”), age 41, is a resident of Corona, California.  Between 

October 2008 and January 2009, Smith promoted and sold interests in the Rockwell Energy 

offerings, and he received, directly or indirectly, approximately $990,000 in sales related fees.  

Smith does not hold a securities license. 

15. Stuart E. Rawitt (“Rawitt”), age 42, is a resident of Woodland Hills, California. 

Between September 2008 and January 2009, he promoted and sold interests in the Rockwell 

Energy offerings. Rawitt received, directly or indirectly, approximately $275,000 in 

commissions from the sale of interests in Fund II.  Rawitt does not hold a securities license.   

16. Brian W. Walsh (“Walsh”), age 55, is a resident of San Diego, California.  

Between April 2008 and January 2009, received, directly or indirectly, approximately $355,000 

in so-called “referral fees” for sales made by people he enlisted to solicit investments on behalf 

of the Rockwell Energy funds.  Walsh does not hold a securities license.   

FACTS 

17. Shindler formed Fund I and, together with James, Fund II (collectively, the 

“Rockwell Energy” funds) in April 2008 and September 2008, respectively.  Shindler structured 

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the Rockwell Energy funds as limited partnerships, each with 35 LP interests at $100,000 per 

interest.  Shindler raised the full $3.5 million from investors in Fund I, and, together with James, 

approximately $2.0 million from investors in Fund II.  Defendants offered and sold interests in 

the Rockwell Energy funds to the public through general solicitations of interest.   

Fund I 

18. According to Shindler, he created Fund I around a technology that allegedly 

improves the productivity of marginal gas wells.  The PPM refers to the technology as a “green” 

technology and calls it a Passive Dehydration System or PDS.  The device purportedly enhances 

production by removing water from unprocessed natural gas in a manner that is more efficient 

than traditional methods.   

19. According to offering materials, PDS technology “results in an immediate 

increase in production of 40%,” and the “production and revenue increase . . . mitigat[es] risk 

completely.”  The statement that the device “mitigates” risk “completely” is either misleading or 

patently false. 

20. The private placement memorandum (“PPM”) and promotional materials for 

Fund I style the offering as an income investment that pays investors monthly distributions 

“secured” by existing and to-be-acquired gas production.   

21. The PPM falsely states that RET owned working interests in two producing gas 

wells, and that Fund I intended to purchase those interests and outfit the wells with PDS 

technology.  In reality, in June 2008, at the time these representations were made to investors, 

RET did not own any interests in either well, and only one of the two was producing.  Fund I 

never acquired any interest in the non-producing well because, according to Shindler, it turned 

out to be a dry hole.   

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22. In addition, the offering materials include a “case study” that describes the 

purported benefit of PDS technology based on anticipated production figures for another well, 

and claims that the well is “company owned.”  In reality, neither RET nor Fund I owned the 

well.   

23. The offering materials also falsely claim that Fund I “currently owns” an 

“inventory of 20 wells,” with which the fund “will be able to increase its monthly distributions” 

as it adds new wells from its inventory to the program.  In fact, those interests were not owned 

by Fund I; rather, they were owned by a former business partner of Shindler.  Fund I never 

acquired any interests in those wells. 

24. Fund I instead acquired well interests from others with whom Shindler had had 

prior business dealings, including James.  By August 2008, Fund I had acquired working 

interests at four different gas well sites.  Between the four well sites, Fund I owns fractional 

interests in 14 different gas wells.  RET has deployed only one PDS unit, which services four 

wells, all at the same site. 

25. In the Fund I offering materials, Shindler told investors that the fund “will payout 

18% annually which is paid out 1.5% monthly, from the date of investment,” and that returns 

would climb as high as 30% “as additional production is brought online.”  Shindler never 

disclosed to investors that there existed no reasonable basis on which he could project such 

returns. 

26. As promised, Shindler started paying investors 1.5% monthly returns soon after 

they invested in Fund I.  The gas well interests that Fund I owned, however, never generated 

sufficient production revenue to support such high returns.   

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27. At full subscription, the fund needed $52,500 in monthly production revenue to 

meet its distribution commitments.  Fund I was fully subscribed by October 2008, but was  

earning, on average, only about $20,000 in monthly production revenue.  Fund I never earned 

more than $42,675 in production revenue in a single month, and, since September 2008, has not 

earned more than $18,000 in a single month.   

28. Nevertheless, Shindler sent investors monthly distribution payments at the 

promised rate of return up until December 2008, at which time he cut the payments to roughly 

1% monthly.  Shindler told investors at the time that the drop was due to price declines in the 

market for natural gas.  In reality, Fund I’s assets never performed well enough to support 1% 

monthly returns, let alone the 1.5% returns originally promised. 

29. In an apparent effort to bolster the fund’s returns, Shindler caused Fund I to make 

two “investments” that were unrelated to interests in oil-and-gas properties, and which were not 

disclosed to investors as part of the fund’s investment strategy. 

30. Shindler used investor funds to make a loan of $130,000 to an entity co-owned by 

James’ brother.  The entity agreed to pay RET a monthly interest payment of $3,800, which 

amounts to an annual interest rate of 35%.   

31. Shindler designed the transaction to generate sham revenue with which to service 

the monthly income payments Fund I promised its investors.    In documents Shindler prepared 

for and provided to the Commission, he falsely categorized the interest payments from the loan 

as production revenue. 

32. Shindler also put $100,000 of investor money in a commodities hedge fund that, 

from September 2008 to January 2009, purported to generate monthly returns to Fund I ranging 

from 4.5% to 15%.  Shindler never disclosed to investors, through the PPM or otherwise, that 

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returns on their investments would be generated through loans to third parties, or that Fund I 

would invest in anything other than oil-and-gas properties. 

33. Shindler converted investor proceeds to improper personal uses as well. Under the 

PPM for Fund I, the general partner is entitled to management fees equal to 10% of the gross 

monthly revenue generated by the fund.  As of January 2009, Fund I had received roughly 

$128,000 in production revenue, of which Shindler would be entitled to $12,800 in management 

fees.  Shindler, however, paid himself more than $25,000, and spent another $15,000 on travel, 

meals, and entertainment.   

34. In addition, Shindler made some questionable and possibly improper payments 

from investor funds on deposit with Fund I.  He caused Fund I to pay: 1) $60,000 to his mother, 

his wife, and his father for alleged “administrative” services; 2) $100,000 to a company Shindler 

owns for which Fund I received no known benefit; and 3) over $45,000 to defendant James for 

alleged “consulting” services. 

35. In addition, Shindler used $20,000 of investor proceeds from RET’s deposit 

account to fund distribution payments to investors.  In so doing, he paid investors “returns” using 

their own money instead of production revenue – i.e., Ponzi payments.    

36. As of July 2009, RET had dissipated all but approximately $12,000 of the 

investor funds held in Fund I.  At the request of the Commission’s staff, Shindler agreed to place 

these remaining funds in escrow. 

Fund II 

37. Fund II purported to rely on the same investment strategy as Fund I – acquiring 

gas wells and equipping them with PDS units to make them more productive – and the offering 

materials for the two funds contain similar representations.   

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38. Describing the fund’s “investment objective,” the PPM for Fund II falesly states 

that it “will open with two wells in the inventory of target acquisitions” and that “this will ensure 

the Fund is profitable and has a positive cash flow from inception.”  The PPM for Fund II also 

identifies, as a separate investment purpose, purchasing oil-and-gas leases, either to drill wells 

for the fund or to resell to other oil companies.   

39. Both Shindler and James reviewed and approved the offering materials that REM 

prepared for investors in Fund II.  Those materials offered investors the same returns Shindler 

touted to investors in Fund I – 18% annual returns, paid out in increments of 1.5% per month.  

Shindler and James never disclosed to investors that there existed no reasonable basis on which 

they could project such returns. 

40. In fact, Fund II never invested in any gas wells or sought to benefit from PDS 

technology.  Rather, the only investment it ever made was in a structured transaction that 

Shindler engineered to generate sham revenue with which to pay Fund II investors. 

41. Through the structured transaction, Shindler, using James as an intermediary, 

arranged for Fund II to receive monthly payments from a business associate of James.  In order 

to enter into the transaction, and personally profit from it, James resigned from Fund II.       

42. Pursuant to the transaction, James entered into an agreement with TOEI 2008-3 

LLC (“TOEI”) – an entity controlled by a business associate – under which James agreed to pay 

TOEI $500,000 for the purported purpose of acquiring oil-and-gas leases and royalty interests.  

James simultaneously assigned 75% of his interest in the agreement to Fund II, and reserved to 

himself the remaining 25%.  Fund II made the $500,000 payment directly to TOEI, with no 

financial contribution by James.  TOEI used $375,000 of the payment to purchase a 1,500 acre 

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lease.  Under the terms of the agreement and assignment, Fund II, TOEI, and James would split 

the profits from any eventual sale of the lease.   

43. In addition, under the terms of the agreement, TOEI agreed to make an initial 

payment back to James of $12,500 followed by 9 monthly payments of $15,000 each.  James 

assigned these payments to Fund II, and Shindler used them to make distributions to Fund II 

investors.   

44. In communications with investors, Shindler falsely characterized this arrangement 

as TOEI’s agreement to “pay [Fund II] 18% per year for nine months . . . in consideration for the 

[$500,000] investment.”  Under the terms of the agreement, however, TOEI was ultimately 

entitled to recover back from Fund II the full $147,500 in payments.  The refund is to come from 

the proceeds of the sale of the oil-and-gas lease, and is to be paid to TOEI before any returns are 

paid to Fund II.   The $147,500 in payments from TOEI to Fund II is, therefore, not a return on 

investment, but rather a loan transaction.   

45. The sole purpose of the payments from TOEI was to fund income distributions to 

investors.  With James’ assistance, Shindler structured the transaction specifically to generate 

payment amounts that met or exceeded 1.5% monthly returns on the amount under investment by 

Fund II at the time.  James terminated the transaction with TOEI after the Commission’s staff 

questioned Shindler about it.  

46. In addition to entering into the fraudulent transaction with TOEI, Shindler made 

some questionable and possibly improper payments from investor funds on deposit with Fund II.  

For example, Shindler paid almost $60,000 to a company he owns for which Fund II received no 

known benefit.  Shindler paid more than $56,000 to his mother for alleged “administrative” 

services.  In addition, he paid $14,000 to a plastic surgeon, $3,500 to a ski resort in Vail, 

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Colorado, $6,500 to settle a debt owed by Fund I, and $12,000 for five LCD televisions, and TV 

and satellite installation.    

47. As of July 2009, REM had dissipated all but approximately $350,000 of the 

investor funds held in Fund II.  At the request of the Commission’s staff, Shindler agreed to 

place these remaining funds in escrow.  

Rockwell Energy Salesmen 

48. Shindler and James also falsely told investors that Rockwell Energy would pay 

sales commissions only to registered broker-dealers, and that no more than 25.5% of investor 

proceeds would go to pay sales commissions or other promotional fees.  Rockwell Energy 

actually used only unlicensed salesmen to solicit investors, and Shindler caused Fund I and Fund 

II to pay them fees as high as 40%.   

49. Of the $6 million raised from investors, Shindler caused the funds to pay roughly 

$2.3 million in commissions or other sales-related fees to the individuals who sold interests in 

the Rockwell Energy offerings.  In most, if not all, cases, the salesmen “cold called” people from 

lead lists of purportedly accredited investors.   

50. Defendant Todd Smith made almost $1 million in sales-related fees through direct 

solicitations to potential investors.   

51. Defendant Stuart Rawitt made approximately $275,000, in sales-related fees 

through direct solicitations to potential investors.   

52. Defendant Brian Walsh, who received approximately $355,000 in “referral fees,” 

claims not to have solicited investors directly, but to have arranged, through a company he 

created, for two or more individuals to solicit investors on behalf of the Rockwell Energy funds.  

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Shindler paid Walsh’s company sales commissions directly.  Walsh kept a majority of the fees, 

and passed the remainder on to the salesmen.  

53. Walsh also was instrumental in helping Shindler to get Rockwell Energy off the 

ground.  Shindler created Fund I as a result of one or more meetings he had with Walsh.  Walsh 

held himself out to Shindler as a “fund raiser” from California who had a database of “clients” 

from whom to solicit investments.  Walsh gave Shindler feedback on how to put together the 

offering materials, and he introduced Shindler to Smith, the salesman who, of all the Rockwell 

Energy salesmen, raised the most money from investors.   

FIRST CLAIM 
AS TO DEFENDANTS RET, REM, SHINDLER AND JAMES 

 
Violation of Section 10(b) of the Exchange Act and Rule 10-5 

 
54. Plaintiff Commission repeats and realleges paragraphs 1 through 53 of this 

Complaint and incorporated herein by reference as if set forth verbatim. 

55. Defendants RET, REM, Shindler, and James, directly or indirectly, singly or in 

concert with others, in connection with the purchase and sale of securities, by use of the means 

and instrumentalities of interstate commerce and by use of the mails have:  (a) employed devices, 

schemes and artifices to defraud;  (b) made untrue statements of material facts and omitted to 

state material facts necessary in order to make the statements made, in light of the circumstances 

under which they were made, not misleading; and (c) engaged in acts, practices and courses of 

business which operate as a fraud and deceit upon purchasers, prospective purchasers and other 

persons. 

56. As a part of and in furtherance of their scheme, defendants RET, REM, Shindler, 

and James, directly and indirectly, prepared, disseminated or used contracts, written offering 

documents, promotional materials, investor and other correspondence, and oral presentations, 

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which contained untrue statements of material facts and misrepresentations of material facts, and 

which omitted to state material facts necessary in order to make the statements made, in light of 

the circumstances under which they were made, not misleading, including, but not limited to, 

those set forth in Paragraphs 1 through 53, above. 

57. Defendants RET, REM, Shindler, and James made the referenced 

misrepresentations and omissions knowingly or with severe and reckless disregard of the truth. 

58. For these reasons, defendants RET, REM, Shindler, and James have violated and, 

unless enjoined, will continue to violate the provisions of Section 10(b) of the Exchange Act [15 

U.S.C. § 78j(b)] and Exchange Act Rule 10b-5 [17 C.F.R. § 240.10b-5]. 

SECOND CLAIM 
AS TO DEFENDANTS RET, REM, SHINDLER AND JAMES 

 
Violations of Section 17(a) of the Securities Act 

59. Plaintiff Commission repeats and realleges paragraphs 1 through 53 of this 

Complaint and incorporated herein by reference as if set forth verbatim. 

60. Defendants RET, REM, Shindler, and James, directly or indirectly, singly, in 

concert with others, in the offer and sale of securities, by use of the means and instruments of 

transportation and communication in interstate commerce and by use of the mails, have:  (a) 

employed devices, schemes or artifices to defraud;  (b) obtained money or property by means of 

untrue statements of material fact or omissions to state material facts necessary in order to make 

the statements made, in light of the circumstances under which they were made, not misleading; 

and (c) engaged in transactions, practices or courses of business which operate or would operate 

as a fraud or deceit. 

61. As part of and in furtherance of this scheme, defendants RET, REM, Shindler, 

and James, directly and indirectly, prepared, disseminated or used contracts, written offering 

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documents, promotional materials, investor and other correspondence, and oral presentations, 

which contained untrue statements of material fact and which omitted to state material facts 

necessary in order to make the statements made, in light of the circumstances under which they 

were made, not misleading, including, but not limited to, those statements and omissions set 

forth in paragraph 1 through 53 above. 

62. Defendants RET, REM, Shindler, and James made the referenced 

misrepresentations and omissions knowingly or with severe and reckless disregard of the truth. 

63. For these reasons, defendants RET, REM, Shindler, and James have violated and, 

unless enjoined, will continue to violate Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

THIRD CLAIM 
AS TO ALL DEFENDANTS 

 
Violations of Section 5(a) and 5(c) of the Securities Act 

64. Plaintiff Commission repeats and realleges paragraphs 1 through 53 of this 

Complaint and incorporated herein by reference as if set forth verbatim. 

65. Defendants, directly or indirectly, singly and in concert with others, have been 

offering to sell, selling and delivering after sale, certain securities, and have been, directly and 

indirectly: (a) making use of the means and instruments of transportation and communication in 

interstate commerce and of the mails to sell securities, through the use of written contracts, 

offering documents and otherwise; (b) carrying and causing to be carried through the mails and 

in interstate commerce by the means and instruments of transportation, such securities for the 

purpose of sale and for delivery after sale; and (c) making use of the means or instruments of 

transportation and communication in interstate commerce and of the mails to offer to sell such 

securities. 

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66. As described in this Complaint, defendants offered and sold interests in one or 

both of the Rockwell Energy funds to the public through general solicitations of interest.  No 

registration statement has been filed with the Commission or is otherwise in effect with respect 

to these securities. 

67. Defendant Shindler, in the case of both Rockwell Energy funds, and defendant 

James, in the case of Fund II, offered and sold securities as control persons of the issuers who 

prepared and/or approved the various offering documents, and who approved the hiring of the 

salesmen to sell the offerings.   

68. Defendant Walsh was a necessary participant in the distribution of Rockwell 

Energy securities, and a substantial factor in the distribution’s success. 

69. For these reasons, defendants have violated and, unless enjoined, will continue to 

violate Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a) and 77e(c)]. 

FOURTH CLAIM 
AS TO DEFENDANTS SMITH, RAWITT, AND WALSH 

 
Violations of Section 15(a)(1) Of The Exchange Act 

70. Plaintiff Commission repeats and realleges paragraphs 1 through 53 of this 

Complaint and incorporated herein by reference as if set forth verbatim. 

71. At the times alleged in this Complaint, defendants Smith, Rawitt, and Walsh have 

been in the business of effecting transactions in securities for the accounts of others. 

72. Defendants Smith, Rawitt, and Walsh made use of the mails and of the means and 

instrumentalities of interstate commerce to effect transactions in and to induce or attempt to 

induce the purchase of securities. 

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73. At the times alleged in this Complaint, defendants Smith, Rawitt, and Walsh were 

not registered with the Commission as a broker or dealer, as required by Section 15(a) of the 

Exchange Act [15 U.S.C. § 78o(a)]. 

74. By reason of the foregoing, defendants Smith, Rawitt, and Walsh have violated 

and, unless enjoined, will continue to violate Section 15(a)(1) of the Exchange Act [15 U.S.C. 

§78o(a)(1)]. 

RELIEF REQUESTED 

 Plaintiff respectfully requests that this Court: 

I. 

 Permanently enjoin defendants RET, REM, Shindler, and James from violating Sections 

5(a), 5(c) and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 

thereunder. 

II. 

 Permanently enjoin defendants Smith, Rawitt, and Walsh from violating Sections 5(a) 

and 5(c) of the Securities Act and Section 15(a)(1) of the Exchange Act. 

III. 

 Order the defendants to disgorge an amount equal to the funds and benefits they obtained 

illegally as a result of the violations alleged herein, and to pay prejudgment interest on those 

funds and benefits. 

IV. 

 Order civil penalties against the defendants pursuant to Section 20(d) of the Securities 

Act [15 U.S.C. § 77t(d)], and Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)], for their 

securities law violations. 

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Complaint 

V. 

 Order any additional relief that this Court may deem just and proper. 

 
Dated:  December 22, 2009   Respectfully submitted,  

s/Jennifer D. Brandt 
      JENNIFER D. BRANDT 
      Attorney-in-charge 
      Texas Bar No. 00796242 
      S.D. Texas Bar No. 37943  
      JASON C. RODGERS  
      Texas Bar No. 24005540 
      S.D. Texas Bar No. Pending Renewal  
      U.S. Securities and Exchange Commission 
      Burnett Plaza, Suite 1900 
      801 Cherry Street, Unit #18 

Fort Worth, TX 76102-6882 
(817) 978-6442 

  (817) 978-4927 (facsimile) 
  [email protected] 
  

COUNSEL FOR PLAINTIFF SECURITIES AND 
EXCHANGE COMMISSION 

 
 

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	FOR THE SOUTHERN DISTRICT OF TEXAS
	HOUSTON DIVISION
	________________________________________________
	SECURITIES AND EXCHANGE COMMISSION, §
	Violations of Section 15(a)(1) Of The Exchange Act