SEC v. NATHAN HALSEY, No. 3:16-cv-00450, Northern District of Texas (Feb. 19, 2016)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION

SECURITIES AND EXCHANGE COMMISSION, §
        §
Plaintiff,      §
        §
v.        § Case No.:   3:16-cv-450
       §
Nathan Halsey and TexStar Oil Co., Ltd.,    §
        §
 Defendants.         §
_______________________________________________  §

COMPLAINT
For its complaint against Defendants Nathan Halsey and TexStar Oil Co., Ltd.
(“TexStar”), Plaintiff Securities and Exchange Commission (“SEC” or “Commission”) alleges as
follows:
Summary
1. From approximately late 2011 through at least March 2014, Halsey carried out a
securities fraud scheme through TexStar, a Dallas-based oil-and-gas company he controlled,
raising at least $1.1 million.  In January 2012, Halsey invited a group of investors from China to
Dallas to visit an oil well owned by another company—referred to anonymously in this
complaint as “Company A”—unrelated to TexStar.  These and other investors later sent Halsey
$1.1 million to acquire interests in the Company A well.  Without disclosure to investors, Halsey
diverted their money to TexStar.  When the investors later complained that they were not
receiving returns from their well investment, Halsey entered agreements with them, stating that
their well investment had been “converted” to shares of stock in another Halsey-controlled
company, TexStar Oil Corp. (“TexStar Corp”).  The agreement was false:  The investors never
owned any interest in the well, and no such stock conversion ever took place.

SEC v. Nathan Halsey, et al         Page 2
COMPLAINT

2. In March 2012, Halsey opened a TexStar office in Shanghai, China.  There, he
employed consultants to solicit investors.  Through telephone and face-to-face investor
presentations, the TexStar consultants offered TexStar limited-partnership securities for sale to
prospective investors in China and Southeast Asia.  At Halsey’s direction, the consultants
disseminated to investors a prospectus containing statements that, among other things, TexStar
held profitable oil-and-gas assets, that it had history of drilling and production successes, and
that it made high rates of return for investors.  In reality, all of these statements were false:
TexStar held no profitable oil-and-gas assets, never drilled or produced any wells, and never
generated investor returns.
3. In or around June 2013, Halsey formed a marketing company called Insider 21,
which offered members “networking opportunities” and “investment resources.”  To attract
members to Insider 21, Halsey offered prospective members shares of TexStar Corp stock that he
owned.  He distributed approximately 1.8 million of such shares under this program, but he never
filed a Form 4 with the Commission to report the changes in beneficial ownership of his stock.
4. By reason of the foregoing, TexStar violated Section 17(a) of the Securities Act of
1933 (“Securities Act”) [15 U.S.C. § 77q(a)], Section 10(b) of the Securities Exchange Act of
1934 (“Exchange Act”) [15 U.S.C. §§ 78j(b)   and 78o(a)], and Exchange Act Rule 10b-5 [17
C.F.R. § 240.10b-5].  Halsey violated Securities Act Section 17(a) [15 U.S.C. § 77q(a)],
Exchange Act Sections 10(b) and 16(a) [15 U.S.C. §§ 78j(b) and 78p(a)], and Exchange Act
Rules 10b-5 and 16a-3 [17 C.F.R. §§ 240.10b-5 and 240.16a-3]  .
5. In the interest of protecting the public from violations by the Defendants, the SEC
seeks, among other things, permanent injunctions, disgorgement plus prejudgment interest, and
civil money penalties from each Defendant and an officer-and-director bar and conduct-based

SEC v. Nathan Halsey, et al         Page 3
COMPLAINT

injunction against Halsey.
Jurisdiction and Venue
6. The SEC brings this action under Securities Act Section 20(b) [15 U.S.C. §
77t(b)] and Exchange Act Section 21(d) [ 15 U.S.C. § 78u(d)], seeking to restrain and enjoin the
Defendants permanently from engaging in such acts and practices as alleged herein.
7. This Court has jurisdiction over this action under Section 22(a) of the Securities
Act [15 U.S.C. § 77v(a)] and Sections 21(e) and 27 of the Exchange Act [15 U.S.C. §§ 78u(e)
and 78aa].  Each of the he fractional undivided interests in oil and gas rights ( “oil-and-gas
interests”), limited-partnership interests, and stock offered and sold as described in this
complaint is a “security” as that term is defined under Securities Act Section 2(a)(1) [15 U.S. C.
§ 77b(a)(1)] and Exchange Act Section 3(a)(10) [5 U.S. C. § 78c(a)(10)].
8. The Defendants, directly and indirectly, made use of the mails or of the means
and instrumentalities of interstate commerce in connection with the transactions, acts, practices,
and courses of business described in this complaint.
9. Venue is proper because transactions, acts, practices, and courses of business
described in this complaint occurred within the Northern District of Texas.
Parties
10. Plaintiff SEC is an agency of the United States of America charged with
enforcing the federal securities laws.
11. Defendant TexStar is a Texas limited liability company with its principal place of
business in Dallas, Texas.
12. Defendant Halsey is an individual, aged 35, who resides in Dallas, Texas.

SEC v. Nathan Halsey, et al         Page 4
COMPLAINT

STATEMENT OF FACTS
The Beginning of Halsey’s Securities Activities in China and Southeast Asia
13. In approximately May 2011, Halsey formed an offshore corporation called Falcon
Fund to market investment opportunities in China.  Halsey sold memberships in Falcon Fund in
China for prices ranging from $1,000 to $5,000, eventually increasing the company’s
membership roster to approximately 6,000 by October 2011.
14. Through Falcon Fund, Halsey purported to offer members training on how to
invest in foreign markets and opportunities to purchase regional-distribution rights to various
multi-level-marketing products.  From Dallas, Texas, Halsey managed Falcon Fund through
promoters in China, whom he paid to carry out Falcon Fund’s objectives in China and Southeast
Asia.
15. Halsey founded TexStar in 2011.  Halsey served as TexStar’s president and
managing member.
16. In 2011, Halsey acquired control over a  Nevada public shell company called
Millennia, Inc., which eventually changed its name to become TexStar Corp.  TexStar Corp was
an SEC-reporting company whose common stock was registered with the SEC under Exchange
Act Section 12 [15 U.S.C. § 78l] and quoted for public sale on www.otcmarkets.com under the
symbol TEXS.  Halsey served as TexStar Corp’s president, CEO, CFO, and sole director.
17. Halsey exercised control over Falcon Fund, TexStar, and TexStar Corp.  He held
ultimate authority over the three companies, including the content of all of their public
statements and whether to disseminate such statements.
The Company A Investment
18. In late 2011, Halsey invited a representative of Company A, a Texas oil-and-gas

SEC v. Nathan Halsey, et al         Page 5
COMPLAINT

company unaffiliated with Halsey or TexStar, to present an investment opportunity to a group of
Falcon Fund members in China.  Company A was seeking to raise money by selling securities in
the form of oil-and-gas interests in a Company A oil-and-gas well in Texas.  The Company A
representative made the presentation to the Falcon Fund members at a meeting in China in or
around December 2011, explaining that Company A was offering for sale interests in the
Company A well.
19. In January 2012, Halsey invited a group of Falcon Fund members to visit Texas.
Approximately 25 members traveled from China to Texas for a range of activities paid for and
hosted by Halsey, including a chuck wagon BBQ lunch at the Company A well site.  At the
BBQ, the Company A representative gave another presentation, introduced Company A’s
management team, and answered questions by the Falcon Fund members for several hours.
20. After the Falcon Fund members returned home, three Falcon Fund promoters in
China, at Halsey’s direction, used Company A offering materials to raise approximately $1.1
million from at least 16 Chinese investors in the first half of 2012.  Some of these investors had
attended Halsey’s BBQ at the Company A well in Texas.
21. At Halsey’s direction, the promoters transferred the investment proceeds to
Halsey.  Although Halsey knew or was severely reckless in not knowing that the money was
raised for investment in the Company A well interests, Halsey directed the money to TexStar
rather than to Company A.  At TexStar, Halsey used the money for, among other things, funding
the opening of a  TexStar office in Shanghai, China.  Halsey did not disclose to the investors that
he directed their money away from Company A or that TexStar received their money.  And
TexStar gave the investors nothing in return for the funds it received.
22. In late 2013, Halsey learned that investors were questioning the status and

SEC v. Nathan Halsey, et al         Page 6
COMPLAINT

performance of their purported Company A investments and the lack of returns.  Even then,
Halsey did not disclose to the investors that he had directed their money into TexStar.
23. Halsey subsequently signed agreements with the investors, promising them that
Falcon Fund would convert every “dollar in [Company A] orders” into four shares of TexStar
Corp stock.  The agreements provided that the investors had no “rights to request the company to
convert the shares back to [Company A].”  In reality, Halsey knew or was severely reckless in
not knowing that the shares could not have been converted “back” to Company A, because
Company A never received the investments in the first place.
24. The agreements further stated:  “All [Company A] dividends will cease to stop
[sic].”  Halsey knew or was severely reckless in not knowing that, in reality, no Company A
dividends had ever even begun, because Company A never received the investments.
25. By these agreements, including the transactions in TexStar Corp stock to effect
the purported conversion of so-called Company A orders, Halsey knowingly or severely
recklessly perpetuated the false appearance that the investors had acquired interests in the
Company A well.  And in the same manner, he concealed his misappropriation of their
investment principal, earmarked for the Company A well.
26. A reasonable investor would have considered it important in making an
investment decision regarding Company A, TexStar, or TexStar Corp:  (1) that Halsey would
divert, or had diverted, $1.1 million of investment principal earmarked for Company A to
TexStar; (2) that neither Company A nor TexStar ever issued any interests in exchange for the
$1.1 million; and (3) that no conversion of Company A “orders” into TexStar Corp stock actually
took place.  These undisclosed facts were, therefore, material.  By failing to disclose these facts,
Halsey and TexStar perpetrated a fraudulent scheme on investors and otherwise made and used

SEC v. Nathan Halsey, et al         Page 7
COMPLAINT

untrue statements of material facts in the offer, sale, and purchase of securities.
Halsey and TexStar’s Offering Limited-Partnership Interests
27. Halsey opened the TexStar office in Shanghai, China, in March 2012.  From
January 2012 to November 2013, TexStar employed consultants in China, paying them nearly $1
million to create promotional materials touting TexStar and other Halsey-related companies and
to promote those companies using such materials.  Halsey directed these consultants to offer for
sale securities issued by these companies in the form of limited-partnership interests.  At
Halsey’s direction, the consultants used telephone and face-to-face investor presentations to offer
the securities for sale.  From his office in Dallas, Texas, Halsey approved the promotional
materials and—by telephone and other methods—supervised TexStar’s Shanghai office and its
securities-offering activities in China and Southeast Asia.
28. During this period, and at Halsey’s direction, the TexStar consultants provided
prospective investors in the Shanghai office a prospectus, offering for sale limited-partnership
interests issued by a company called TexStar Investment Corporation, Ltd. (“TexStar
Investment”).  According to the prospectus, TexStar Investment sought to raise $20,000,000 by
selling 40 limited-partnership units for $500,000 apiece.  It described TexStar Investment as the
issuer of the limited-partnership units and explained that TexStar would serve as the general
partner of the limited partnership.  It represented that each investor would receive a monthly
payment based on oil-and-gas production from wells drilled and completed by the limited
partnership.
29. Halsey supervised the prospectus’s preparation, contributed to its content,
including two personal letters, and reviewed and approved the final version before ordering its
distribution to prospective investors.

SEC v. Nathan Halsey, et al         Page 8
COMPLAINT

30. The prospectus contained untrue and misleading statements, as follows:
A. “[T]he company’s assets, which include mineral rights, leased
acreage, proven and estimated reserves, cash and cash equivalents
is in the $160,000,000 U.S.D range.”  In reality, neither TexStar
Investment nor TexStar had any assets.

B. “As a company, we have completed over 50 projects to date.”  In
fact, neither TexStar Investment nor TexStar had ever completed
any projects.

C. Halsey has “ more than 10 years of successfully completed oil &
gas investment programs and projects.”  In reality, Halsey had
never completed an oil-and-gas investment program or project.

D. TexStar has “successfully drilled and produced wells in
Throckmorton County, and owns other oil-and-gas wells in the
county.”  In reality, TexStar never drilled, produced, or owned any
oil-and-gas wells.

E. “Returns average over 40% per year, and in many cases have
exceeded 100%+ per year.”  In reality, TexStar and TexStar
Investment never had any returns.

F. “Current TexStar Projects” include seven oil-and-gas projects in
Texas, West Virginia, the North Sea, and Indonesia.  In reality,
neither TexStar Investment nor TexStar had any such projects.

G. “TexStar Oil has made charitable contributions in every market we
conduct business and I am looking forward to being able to
continue this tradition in China.”  In reality, neither TexStar
Investment nor TexStar made any charitable contributions.

H. The Prospectus listed Kara Sands as TexStar’s “Chief Marketing
Officer” and included a photo of Sands posing alongside former
President George Bush and another photo of her posing with
former Texas Governor Rick Perry.  In reality, TexStar had no
Chief Marketing Officer, and neither Bush nor Perry was
associated with TexStar in any way.

I. The Prospectus included a photo of a purported TexStar officer
posing with two men identified as “TexStar partners in the UAE.”
In reality, the two men were never TexStar partners, investors, or
affiliates.

J. A section titled “TexStar Tours” described with a 9-day trip

SEC v. Nathan Halsey, et al         Page 9
COMPLAINT

itinerary, including activities like “Chuck wagon BBQ lunch
served at a TexStar oil well,” and testimonials like “This was an
amazing our, we will be coming back!”  In reality, TexStar tours
never took place and neither TexStar nor TexStar Investment ever
owned any oil wells to visit.

K.  “In most cases, from the time the partnership is capitalized to the
time the partners start to receive distribution checks is 120 to 180
days.”  In reality, neither TexStar nor TexStar Investments ever
had any capitalized partnerships nor did they ever issue a
distribution check.

31. Through TexStar’s Shanghai office, Halsey disseminated the prospectus described
in paragraph 30, above, to at least 25 prospective investors in China from approximately March
2012 through January 2013.  At the time, Halsey knew or was severely reckless in not knowing
that the statements contained in the prospectus and set forth in paragraph 30, above, were untrue
or otherwise misleading.  Each of the prospectus statements described in paragraph 30, above,
was an untrue statement of a material fact or omitted to state a material fact necessary in order to
make the statements made, in the light of the circumstances under which they were made, not
misleading.
32. In or around June 2013, Halsey formed a marketing company called Insider 21,
which offered members “networking opportunities” and “investment resources.”  Halsey
continued to offer TexStar limited-partnership interests through at least March 2014 through the
Insider 21 website.
Halsey Failed to Make Required SEC Filings
33.   To attract members to Insider 21, Halsey offered prospective members shares of
TexStar Corp stock that he owned.  He distributed approximately 1.8 million of such shares
under this program.  But he never filed a Form 4 with the Commission to report the changes in
beneficial ownership of his TexStar Corp stock as he was required to do under Exchange Act

SEC v. Nathan Halsey, et al         Page 10
COMPLAINT

Section 16(a) and Exchange Act Rule 16a-3   as an officer and director of TexStar Corp.
FIRST CLAIM
Fraud
Violations of Securities Act Section 17(a)
Against TexStar and Halsey

34. Plaintiff Commission re-alleges and incorporates paragraphs 1 through 33 of this
Complaint by reference as if set forth verbatim in this Claim.
35. Defendants TexStar and Halsey directly or indirectly, singly or in concert with
others, in the offer or sale of securities, by use of the means and instrumentalities of interstate
commerce or by use of the mails have:  (a) employed devices, schemes, and artifices to defraud;
(b) obtained money or property by means of untrue statements of a material fact and omitted to
state a material fact 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, and
courses of business which operate or would operate as a fraud and deceit upon the purchasers.
36. With respect to violations of Securities Act Sections 17(a)(2) and (3), Defendants
TexStar and Halsey were negligent in their conduct and untrue and misleading statements
alleged herein.  With respect to violations of Securities Act Section 17(a)(1), Defendants TexStar
and Halsey engaged in the referenced conduct and made the referenced untrue and misleading
statements knowingly or with severe recklessness.
37. For these reasons, Defendants TexStar and Halsey have violated and, unless
enjoined, will continue to violate Securities Act Section 17(a) [15 U.S.C. § 77q(a)].
SECOND CLAIM
Fraud
Violations of Exchange Act Section 10(b) and Rule 10b-5
Against TexStar and Halsey

38. Plaintiff Commission re-alleges and incorporates paragraphs 1 through 33 of this

SEC v. Nathan Halsey, et al         Page 11
COMPLAINT

Complaint by reference as if set forth verbatim in this Claim.
39. Defendants TexStar and Halsey, directly or indirectly, singly or in concert with
others, in connection with the purchase or sale of securities, by use of the means and
instrumentalities of interstate commerce or by use of the mails have:  (a) employed devices,
schemes, and artifices to defraud;  (b) made untrue statements of a material fact and omitted to
state a material fact 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 or would operate as a fraud and deceit upon purchasers, prospective
purchasers, and any other persons.
40. Defendants TexStar and Halsey engaged in the above-referenced conduct and
made the above-referenced untrue and misleading statements knowingly or with severe
recklessness.
41. For these reasons, Defendants TexStar and Halsey violated and, unless enjoined,
will continue to violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 [17
C.F.R. § 240.10b-5].
THIRD CLAIM
Violations of Exchange Act Section 16(a) and Rule 16a-3
[15 U.S.C. § 78o(a) and 17 C.F.R. § 240.16a-3]
Against Halsey

42. Plaintiff Commission re-alleges and incorporates paragraphs 1 through 33 of this
Complaint by reference as if set forth verbatim in this Claim.
43. By engaging in the conduct alleged above, Defendant Halsey violated Exchange
Act Section 16(a) and Exchange Act Rule 16a-3 [15 U.S.C. § 78p(a) and 17 C.F.R. § 240.16a-3]
when he failed to make required filings with the Commission on Form 4 to report the changes in
beneficial ownership of his TexStar Corp stock and, unless enjoined, will continue to violate

SEC v. Nathan Halsey, et al         Page 12
COMPLAINT

Exchange Act Section 16(a) and Rule 16a-3.
RELIEF REQUESTED
Plaintiff Commission respectfully requests that this Court:
(1) Permanently enjoin Defendants Halsey and TexStar from violating Securities Act
Section 17(a) [15 U.S.C. § 77q(a)] and Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule
10b-5 [17 C.F.R. § 240.10b-5];
(2) Permanently enjoin Defendant Halsey from violating Exchange Act Section 16(a)
[15 U.S.C. §§ 78p(a)] Rule 16a-3 [17 C.F.R. § 240.16a-3]  ;
(3) Prohibit Defendant Halsey under Securities Act Section 20(e) [15 U.S.C. § 77t(d)]
and Exchange Act Section 21(d)(2) [15 U.S.C. § 78l] from acting as an officer or director of any
issuer that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. § 78l] or
that is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)];
(4) Permanently enjoin Defendant Halsey from directly or indirectly soliciting
existing or potential investors to purchase or sell securities, provided however, that such
injunction shall not prevent Halsey from purchasing or selling securities for his own account;
(5) Order each Defendant to disgorge an amount equal to the funds and benefits
obtained illegally, or to which the Defendant is otherwise not entitled, as a result of the violations
alleged, plus prejudgment interest on that amount;
(6) Order Defendants TexStar and Halsey to pay civil monetary penalties in an
amount determined appropriate by the Court under Securities Act Section 20(d) [15 U.S.C. §
77t(d)] and Exchange Act Section 21(d) [15 U.S.C. § 78u(d)] for the violations alleged herein;
and
(7) Order such other relief as this Court may deem just and proper.

SEC v. Nathan Halsey, et al         Page 13
COMPLAINT

DATED:  February 17, 2016   Respectfully submitted,

s/Timothy S. McCole
      Timothy S. McCole
      Mississippi Bar No. 10628
      James E. Etri
      Texas Bar No. 24002061
      Rebecca R. Fike
      Texas Bar No. 24065228
United States Securities and Exchange Commission
      Fort Worth Regional Office
      Burnett Plaza, Suite 1900
      801 Cherry Street, Unit #18
        Fort Worth, TX 76102-6882
Phone: 817-978-6453 (tm)
Fax: 917-978-4927
[email protected]

      ATTORNEYS FOR PLAINTIFF

JS 44 Reverse (Rev. 3/99)
CIVIL COVER SHEET
The JS-44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by
law, except as provided by local rules of court.  This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of
the Clerk of Court for the purpose of initiating the civil docket sheet.  (SEE INSTRUCTIONS ON THE REVERSE OF THE FORM.)

I.(a) PLAINTIFFS

 U.S. SECURITIES AND EXCHANGE
 COMMISSION
Defendants-
Nathan Halsey and TexStar Oil Co., Ltd.

(b) COUNTY OF RESIDENCE OF FIRST LISTED PLAINTIFF__________________
                                     (EXCEPT IN U.S. PLAINTIFF CASES)
County of Residence of First Listed Defendant:
                (IN U.S. PLAINTIFF CASES ONLY)  Dallas
NOTE:   IN LAND CONDEMNATION CASES, USE THE LOCATION OF THE
TRACT OF LAND INVOLVED.
(c) ATTORNEY (FIRM NAME, ADDRESS, AND TELEPHONE NUMBER)
Timothy S. McCole
U.S. Securities & Exchange Commission
801 Cherry Street, Suite 1900, Unit 18
Fort Worth, TX  76102-6882  (817) 978-6453
ATTORNEYS (IF KNOWN)
J. Randle Henderson, Esq.
16506 FM 529, Suite 115-107
Houston, TX  77095-1462

II. BASIS OF JURISDICTION (PLACE AN “X” IN ONE BOX ONLY) III. CITIZENSHIP OF PRINCIPAL PARTIES
     (For Diversity Cases Only)
                                       PTF   PTF
(PLACE    AN    “X”    IN    ONE    BOX    FOR
PLAINTIFF       AND       ONE       BOX       FOR
DEFENDANT)
                       PTF   PTF
 1 U.S. Government
            Plaintiff

 2 U.S. Government
            Defendant
 3 Federal Question
       (U.S. Government Not a Party)

 4 Diversity
       (Indicate Citizenship of Parties
        in Item III)
Citizen of This State                 1      1

Citizen of Another State           2      2

Citizen or Subject of a              3      3
  Foreign Country
Incorporated or Principal Place       4     4
  of Business In This State

Incorporated and Principal Place     5    5
  of Business in Another State

Foreign Nation                                    6     6
IV. NATURE OF SUIT (PLACE AN “X” IN ONE BOX ONLY)
CONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES
  110 Insurance
  120 Marine
  130 Miller Act
  140  Negotiable Instrument
  150  Recovery of Overpayment
          & Enforcement of Judgment
    PERSONAL INJURY
 310 Airplane
 315 Airplane  Product
            Liability
  320 Assault, Libel &
              Slander
    PERSONAL INJURY
 362 Personal Injury -
     Med. Malpractice
  365 Personal Injury -
             Product Liability
 610  Agriculture
 620  Other Food & Drug
 625  Drug Related Seizure of
            Property 21 USC 881
 630  Liquor Laws

 422 Appeal 28 USC 156

 423 Withdrawal
             28 USC 157
 400 State Reapprotionment
  410  Antitrust
 430  Banks and Banking
 450 Commerce/ICC
             Rates/etc.
  460 Deportation
 151  Medicare Act

   330 Federal
Employers’  Liability
  368 Asbestos Personal
        Injury Product Liability
  640  R.R. & Truck

PROPERTY RIGHTS
 470 Racketeer Influenced
     and   Corrupt Organizations
 152 Recovery of Defaulted
      Student Loans (Excl. Veterans)

 340  Marine
 345  Marine Product
             Liability
PERSONAL PROPERTY
  370  Other Fraud
  371  Truth in Lending
  650 Airline Regs.
  660 Occupational Safety/Health
  690  Other
 820 Copy rights
 830 Patient
 840 Trademark
 810 Selective Service
 850 Securities
         Commodities/ Exchange
 153 Recovery OF Overpayment
          of Veteran’s Benefits
 350 Motor Vehicle

  380 Other Personal
             Property Damage
LABOR SOCIAL SECURITY
 875 Customer Challenge
           12 USC 3410
 160 Stockholders’ Suits
 190 Other Contract
 195 Contract Product Liability
 355 Motor Vehicle
          Product Liability
 360 Other Personal
Injury
 385  Property Damage
Product Liability
 710 Fair Labor Standards Act

 720 Labor/Mgmt. Relations

 861 HIA (1395FF)
 862 Black Lung (923)
 863 DIWC/DIWW (405(g))
 891 Agricultural Acts
 892 Economic Stabilization
            Act

REAL PROPERTY CIVIL RIGHTS PRISONER PETITIONS
 730 Labor/Mgmt. Reporting &
            Disclosure Act
 864 SSID Title XVI
 865 RSI (405(g))
 893 Environmental Matters
 894 Energy Allocation Act
 210 Land Condemnation

 441 Voting

 510 Motions to Vacate
            Sentence
 740 Railway Labor Act

FEDERAL TAX SUITS
 895 Freedom of
            Information Act
 220 Foreclosure
 230 Rent Lease & Ejectment
 240 Torts to Land
 245 Tort Product Liability
 290 All Other Real Property
 442 Employment
 443 Housing/
Accommodations
 444 Welfare
 440 Other Civil
Rights
               Habeas Corpus:
 530 General
 535 Death Penalty
 540 Mandamus & Other
 550 Civil Rights
 790 Other Labor Litigation

 791 Empl. Ret. Inc.
            Security Act
 870  Taxes (U.S. Plaintiff or
             Defendant)
 871  IRS - Third Party
             26 USC 7609
 900 Appeal of Fee
     Determination Under
     Equal Access to Justice
 950 Constitutionality of
             State Statutes
 890 Other Statutory Actions
V. ORIGIN                                                         (PLACE AN “X” IN ONE BOX ONLY)

 1  Original
         Proceeding

  2 Removed from
         State Court

 3 Remanded from
        Appellate Court

 4 Reinstated  or          5 Transferred from       6 Multidistrict                               7 Appeal to District
         Reopened                   another district                    Litigation                                           Judge from Magistrate
                                            (Specify)                                                                                        Judge
VI. CAUSE OF ACTION  (CITE THE U.S. CIVIL STATUTE UNDER WHICH YOU ARE FILING AND WRITE BRIEF STATEMENT OF CAUSE.  DO NOT CITE JURISDICTIONAL STATUTES UNLESS
DIVERSITY.)    Securities Fraud
Violations of Section: Section 17(a) of the Securities Act of 1933 [15 U.S.C. § 77q(a)], Sections 10(b) and 16(a) of the Securities Exchange Act
of 1934 [15 U.S.C. §§ 78j(b) and 78p(a)] Rules 10b-5 and 16a-3 of the Securities Exchange Act of 1934 [17 C.F.R. §§ 240.10b-5 and 240.16a-
3].
VII.  REQUESTED IN            CHECK IF THIS IS A CLASS ACTION             DEMAND $                      CHECK YES only if demanded in complaint:
        COMPLAINT:                UNDER F.R.C.P. 23                                                                                       JURY DEMAND    YES                NO
VIII. RELATED CASE(S) (See Instructions):
        IF ANY                                              JUDGE     DOCKET NUMBER
DATE
February 17, 2016
SIGNATURE OF ATTORNEY OF RECORD
  /s/Timothy S. McCole
FOR OFFICE USE ONLY
Receipt #____________ AMOUNT _______________ APPLYING IFP _____________ JUDGE ___________________ MAG. JUDGE _______________________

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

DALLAS DIVISION 
 
SECURITIES AND EXCHANGE COMMISSION, § 
        § 

Plaintiff,      § 
        § 
v.        § Case No.:   3:16-cv-450 

       § 
Nathan Halsey and TexStar Oil Co., Ltd.,   § 
        §        
 Defendants.      § 
_______________________________________________  § 
 

COMPLAINT 

For its complaint against Defendants Nathan Halsey and TexStar Oil Co., Ltd. 

(“TexStar”), Plaintiff Securities and Exchange Commission (“SEC” or “Commission”) alleges as 

follows:  

Summary 

1. From approximately late 2011 through at least March 2014, Halsey carried out a 

securities fraud scheme through TexStar, a Dallas-based oil-and-gas company he controlled, 

raising at least $1.1 million.  In January 2012, Halsey invited a group of investors from China to 

Dallas to visit an oil well owned by another company—referred to anonymously in this 

complaint as “Company A”—unrelated to TexStar.  These and other investors later sent Halsey 

$1.1 million to acquire interests in the Company A well.  Without disclosure to investors, Halsey 

diverted their money to TexStar.  When the investors later complained that they were not 

receiving returns from their well investment, Halsey entered agreements with them, stating that 

their well investment had been “converted” to shares of stock in another Halsey-controlled 

company, TexStar Oil Corp. (“TexStar Corp”).  The agreement was false:  The investors never 

owned any interest in the well, and no such stock conversion ever took place. 

Case 3:16-cv-00450-B   Document 1   Filed 02/17/16    Page 1 of 13   PageID 1



SEC v. Nathan Halsey, et al         Page 2 
COMPLAINT 

2. In March 2012, Halsey opened a TexStar office in Shanghai, China.  There, he 

employed consultants to solicit investors.  Through telephone and face-to-face investor 

presentations, the TexStar consultants offered TexStar limited-partnership securities for sale to 

prospective investors in China and Southeast Asia.  At Halsey’s direction, the consultants 

disseminated to investors a prospectus containing statements that, among other things, TexStar 

held profitable oil-and-gas assets, that it had history of drilling and production successes, and 

that it made high rates of return for investors.  In reality, all of these statements were false:  

TexStar held no profitable oil-and-gas assets, never drilled or produced any wells, and never 

generated investor returns. 

3. In or around June 2013, Halsey formed a marketing company called Insider 21, 

which offered members “networking opportunities” and “investment resources.”  To attract 

members to Insider 21, Halsey offered prospective members shares of TexStar Corp stock that he 

owned.  He distributed approximately 1.8 million of such shares under this program, but he never 

filed a Form 4 with the Commission to report the changes in beneficial ownership of his stock. 

4. By reason of the foregoing, TexStar violated Section 17(a) of the Securities Act of 

1933 (“Securities Act”) [15 U.S.C. § 77q(a)], Section 10(b) of the Securities Exchange Act of 

1934 (“Exchange Act”) [15 U.S.C. §§ 78j(b) and 78o(a)], and Exchange Act Rule 10b-5 [17 

C.F.R. § 240.10b-5].  Halsey violated Securities Act Section 17(a) [15 U.S.C. § 77q(a)], 

Exchange Act Sections 10(b) and 16(a) [15 U.S.C. §§ 78j(b) and 78p(a)], and Exchange Act 

Rules 10b-5 and 16a-3 [17 C.F.R. §§ 240.10b-5 and 240.16a-3].   

5. In the interest of protecting the public from violations by the Defendants, the SEC 

seeks, among other things, permanent injunctions, disgorgement plus prejudgment interest, and 

civil money penalties from each Defendant and an officer-and-director bar and conduct-based 

Case 3:16-cv-00450-B   Document 1   Filed 02/17/16    Page 2 of 13   PageID 2



SEC v. Nathan Halsey, et al         Page 3 
COMPLAINT 

injunction against Halsey. 

Jurisdiction and Venue 

6. The SEC brings this action under Securities Act Section 20(b) [15 U.S.C. § 

77t(b)] and Exchange Act Section 21(d) [15 U.S.C. § 78u(d)], seeking to restrain and enjoin the 

Defendants permanently from engaging in such acts and practices as alleged herein. 

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

Act [15 U.S.C. § 77v(a)] and Sections 21(e) and 27 of the Exchange Act [15 U.S.C. §§ 78u(e) 

and 78aa].  Each of the he fractional undivided interests in oil and gas rights (“oil-and-gas 

interests”), limited-partnership interests, and stock offered and sold as described in this 

complaint is a “security” as that term is defined under Securities Act Section 2(a)(1) [15 U.S. C. 

§ 77b(a)(1)] and Exchange Act Section 3(a)(10) [5 U.S. C. § 78c(a)(10)].   

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

and instrumentalities of interstate commerce in connection with the transactions, acts, practices, 

and courses of business described in this complaint.   

9. Venue is proper because transactions, acts, practices, and courses of business 

described in this complaint occurred within the Northern District of Texas. 

Parties 

10. Plaintiff SEC is an agency of the United States of America charged with 

enforcing the federal securities laws. 

11. Defendant TexStar is a Texas limited liability company with its principal place of 

business in Dallas, Texas. 

12. Defendant Halsey is an individual, aged 35, who resides in Dallas, Texas. 

 

Case 3:16-cv-00450-B   Document 1   Filed 02/17/16    Page 3 of 13   PageID 3



SEC v. Nathan Halsey, et al         Page 4 
COMPLAINT 

STATEMENT OF FACTS 

The Beginning of Halsey’s Securities Activities in China and Southeast Asia 

13. In approximately May 2011, Halsey formed an offshore corporation called Falcon 

Fund to market investment opportunities in China.  Halsey sold memberships in Falcon Fund in 

China for prices ranging from $1,000 to $5,000, eventually increasing the company’s 

membership roster to approximately 6,000 by October 2011.   

14. Through Falcon Fund, Halsey purported to offer members training on how to 

invest in foreign markets and opportunities to purchase regional-distribution rights to various 

multi-level-marketing products.  From Dallas, Texas, Halsey managed Falcon Fund through 

promoters in China, whom he paid to carry out Falcon Fund’s objectives in China and Southeast 

Asia. 

15. Halsey founded TexStar in 2011.  Halsey served as TexStar’s president and 

managing member.   

16. In 2011, Halsey acquired control over a Nevada public shell company called 

Millennia, Inc., which eventually changed its name to become TexStar Corp.  TexStar Corp was 

an SEC-reporting company whose common stock was registered with the SEC under Exchange 

Act Section 12 [15 U.S.C. § 78l] and quoted for public sale on www.otcmarkets.com under the 

symbol TEXS.  Halsey served as TexStar Corp’s president, CEO, CFO, and sole director.   

17. Halsey exercised control over Falcon Fund, TexStar, and TexStar Corp.  He held 

ultimate authority over the three companies, including the content of all of their public 

statements and whether to disseminate such statements.   

The Company A Investment 

18. In late 2011, Halsey invited a representative of Company A, a Texas oil-and-gas 

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SEC v. Nathan Halsey, et al         Page 5 
COMPLAINT 

company unaffiliated with Halsey or TexStar, to present an investment opportunity to a group of 

Falcon Fund members in China.  Company A was seeking to raise money by selling securities in 

the form of oil-and-gas interests in a Company A oil-and-gas well in Texas.  The Company A 

representative made the presentation to the Falcon Fund members at a meeting in China in or 

around December 2011, explaining that Company A was offering for sale interests in the 

Company A well. 

19. In January 2012, Halsey invited a group of Falcon Fund members to visit Texas.  

Approximately 25 members traveled from China to Texas for a range of activities paid for and 

hosted by Halsey, including a chuck wagon BBQ lunch at the Company A well site.  At the 

BBQ, the Company A representative gave another presentation, introduced Company A’s 

management team, and answered questions by the Falcon Fund members for several hours. 

20. After the Falcon Fund members returned home, three Falcon Fund promoters in 

China, at Halsey’s direction, used Company A offering materials to raise approximately $1.1 

million from at least 16 Chinese investors in the first half of 2012.  Some of these investors had 

attended Halsey’s BBQ at the Company A well in Texas.   

21. At Halsey’s direction, the promoters transferred the investment proceeds to 

Halsey.  Although Halsey knew or was severely reckless in not knowing that the money was 

raised for investment in the Company A well interests, Halsey directed the money to TexStar 

rather than to Company A.  At TexStar, Halsey used the money for, among other things, funding 

the opening of a TexStar office in Shanghai, China.  Halsey did not disclose to the investors that 

he directed their money away from Company A or that TexStar received their money.  And 

TexStar gave the investors nothing in return for the funds it received.  

22. In late 2013, Halsey learned that investors were questioning the status and 

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SEC v. Nathan Halsey, et al         Page 6 
COMPLAINT 

performance of their purported Company A investments and the lack of returns.  Even then, 

Halsey did not disclose to the investors that he had directed their money into TexStar.   

23. Halsey subsequently signed agreements with the investors, promising them that 

Falcon Fund would convert every “dollar in [Company A] orders” into four shares of TexStar 

Corp stock.  The agreements provided that the investors had no “rights to request the company to 

convert the shares back to [Company A].”  In reality, Halsey knew or was severely reckless in 

not knowing that the shares could not have been converted “back” to Company A, because 

Company A never received the investments in the first place.   

24. The agreements further stated:  “All [Company A] dividends will cease to stop 

[sic].”  Halsey knew or was severely reckless in not knowing that, in reality, no Company A 

dividends had ever even begun, because Company A never received the investments.   

25. By these agreements, including the transactions in TexStar Corp stock to effect 

the purported conversion of so-called Company A orders, Halsey knowingly or severely 

recklessly perpetuated the false appearance that the investors had acquired interests in the 

Company A well.  And in the same manner, he concealed his misappropriation of their 

investment principal, earmarked for the Company A well.   

26. A reasonable investor would have considered it important in making an 

investment decision regarding Company A, TexStar, or TexStar Corp:  (1) that Halsey would 

divert, or had diverted, $1.1 million of investment principal earmarked for Company A to 

TexStar; (2) that neither Company A nor TexStar ever issued any interests in exchange for the 

$1.1 million; and (3) that no conversion of Company A “orders” into TexStar Corp stock actually 

took place.  These undisclosed facts were, therefore, material.  By failing to disclose these facts, 

Halsey and TexStar perpetrated a fraudulent scheme on investors and otherwise made and used 

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SEC v. Nathan Halsey, et al         Page 7 
COMPLAINT 

untrue statements of material facts in the offer, sale, and purchase of securities.  

Halsey and TexStar’s Offering Limited-Partnership Interests 

27. Halsey opened the TexStar office in Shanghai, China, in March 2012.  From 

January 2012 to November 2013, TexStar employed consultants in China, paying them nearly $1 

million to create promotional materials touting TexStar and other Halsey-related companies and 

to promote those companies using such materials.  Halsey directed these consultants to offer for 

sale securities issued by these companies in the form of limited-partnership interests.  At 

Halsey’s direction, the consultants used telephone and face-to-face investor presentations to offer 

the securities for sale.  From his office in Dallas, Texas, Halsey approved the promotional 

materials and—by telephone and other methods—supervised TexStar’s Shanghai office and its 

securities-offering activities in China and Southeast Asia. 

28. During this period, and at Halsey’s direction, the TexStar consultants provided 

prospective investors in the Shanghai office a prospectus, offering for sale limited-partnership 

interests issued by a company called TexStar Investment Corporation, Ltd. (“TexStar 

Investment”).  According to the prospectus, TexStar Investment sought to raise $20,000,000 by 

selling 40 limited-partnership units for $500,000 apiece.  It described TexStar Investment as the 

issuer of the limited-partnership units and explained that TexStar would serve as the general 

partner of the limited partnership.  It represented that each investor would receive a monthly 

payment based on oil-and-gas production from wells drilled and completed by the limited 

partnership.     

29. Halsey supervised the prospectus’s preparation, contributed to its content, 

including two personal letters, and reviewed and approved the final version before ordering its 

distribution to prospective investors.  

Case 3:16-cv-00450-B   Document 1   Filed 02/17/16    Page 7 of 13   PageID 7



SEC v. Nathan Halsey, et al         Page 8 
COMPLAINT 

30. The prospectus contained untrue and misleading statements, as follows: 

A. “[T]he company’s assets, which include mineral rights, leased 
acreage, proven and estimated reserves, cash and cash equivalents 
is in the $160,000,000 U.S.D range.”  In reality, neither TexStar 
Investment nor TexStar had any assets.   

 
B. “As a company, we have completed over 50 projects to date.”  In 

fact, neither TexStar Investment nor TexStar had ever completed 
any projects. 
 

C. Halsey has “more than 10 years of successfully completed oil & 
gas investment programs and projects.”  In reality, Halsey had 
never completed an oil-and-gas investment program or project.   
 

D. TexStar has “successfully drilled and produced wells in 
Throckmorton County, and owns other oil-and-gas wells in the 
county.”  In reality, TexStar never drilled, produced, or owned any 
oil-and-gas wells.   
 

E. “Returns average over 40% per year, and in many cases have 
exceeded 100%+ per year.”  In reality, TexStar and TexStar 
Investment never had any returns. 
 

F. “Current TexStar Projects” include seven oil-and-gas projects in 
Texas, West Virginia, the North Sea, and Indonesia.  In reality, 
neither TexStar Investment nor TexStar had any such projects. 
 

G. “TexStar Oil has made charitable contributions in every market we 
conduct business and I am looking forward to being able to 
continue this tradition in China.”  In reality, neither TexStar 
Investment nor TexStar made any charitable contributions. 
 

H. The Prospectus listed Kara Sands as TexStar’s “Chief Marketing 
Officer” and included a photo of Sands posing alongside former 
President George Bush and another photo of her posing with 
former Texas Governor Rick Perry.  In reality, TexStar had no 
Chief Marketing Officer, and neither Bush nor Perry was 
associated with TexStar in any way. 
 

I. The Prospectus included a photo of a purported TexStar officer 
posing with two men identified as “TexStar partners in the UAE.”  
In reality, the two men were never TexStar partners, investors, or 
affiliates. 
 

J. A section titled “TexStar Tours” described with a 9-day trip 

Case 3:16-cv-00450-B   Document 1   Filed 02/17/16    Page 8 of 13   PageID 8



SEC v. Nathan Halsey, et al         Page 9 
COMPLAINT 

itinerary, including activities like “Chuck wagon BBQ lunch 
served at a TexStar oil well,” and testimonials like “This was an 
amazing our, we will be coming back!”  In reality, TexStar tours 
never took place and neither TexStar nor TexStar Investment ever 
owned any oil wells to visit. 
 

K.  “In most cases, from the time the partnership is capitalized to the 
time the partners start to receive distribution checks is 120 to 180 
days.”  In reality, neither TexStar nor TexStar Investments ever 
had any capitalized partnerships nor did they ever issue a 
distribution check.   

 
31. Through TexStar’s Shanghai office, Halsey disseminated the prospectus described 

in paragraph 30, above, to at least 25 prospective investors in China from approximately March 

2012 through January 2013.  At the time, Halsey knew or was severely reckless in not knowing 

that the statements contained in the prospectus and set forth in paragraph 30, above, were untrue 

or otherwise misleading.  Each of the prospectus statements described in paragraph 30, above, 

was an untrue statement of a material fact or omitted to state a material fact necessary in order to 

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

misleading. 

32. In or around June 2013, Halsey formed a marketing company called Insider 21, 

which offered members “networking opportunities” and “investment resources.”  Halsey 

continued to offer TexStar limited-partnership interests through at least March 2014 through the 

Insider 21 website.   

Halsey Failed to Make Required SEC Filings 

33.   To attract members to Insider 21, Halsey offered prospective members shares of 

TexStar Corp stock that he owned.  He distributed approximately 1.8 million of such shares 

under this program.  But he never filed a Form 4 with the Commission to report the changes in 

beneficial ownership of his TexStar Corp stock as he was required to do under Exchange Act 

Case 3:16-cv-00450-B   Document 1   Filed 02/17/16    Page 9 of 13   PageID 9



SEC v. Nathan Halsey, et al         Page 10 
COMPLAINT 

Section 16(a) and Exchange Act Rule 16a-3 as an officer and director of TexStar Corp. 

FIRST CLAIM 
Fraud 

Violations of Securities Act Section 17(a) 
Against TexStar and Halsey 

 
34. Plaintiff Commission re-alleges and incorporates paragraphs 1 through 33 of this 

Complaint by reference as if set forth verbatim in this Claim. 

35. Defendants TexStar and Halsey directly or indirectly, singly or in concert with 

others, in the offer or sale of securities, by use of the means and instrumentalities of interstate 

commerce or by use of the mails have:  (a) employed devices, schemes, and artifices to defraud;  

(b) obtained money or property by means of untrue statements of a material fact and omitted to 

state a material fact 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, and 

courses of business which operate or would operate as a fraud and deceit upon the purchasers. 

36. With respect to violations of Securities Act Sections 17(a)(2) and (3), Defendants 

TexStar and Halsey were negligent in their conduct and untrue and misleading statements 

alleged herein.  With respect to violations of Securities Act Section 17(a)(1), Defendants TexStar 

and Halsey engaged in the referenced conduct and made the referenced untrue and misleading 

statements knowingly or with severe recklessness.   

37. For these reasons, Defendants TexStar and Halsey have violated and, unless 

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

SECOND CLAIM 
Fraud 

Violations of Exchange Act Section 10(b) and Rule 10b-5 
Against TexStar and Halsey 

 
38. Plaintiff Commission re-alleges and incorporates paragraphs 1 through 33 of this 

Case 3:16-cv-00450-B   Document 1   Filed 02/17/16    Page 10 of 13   PageID 10



SEC v. Nathan Halsey, et al         Page 11 
COMPLAINT 

Complaint by reference as if set forth verbatim in this Claim. 

39. Defendants TexStar and Halsey, directly or indirectly, singly or in concert with 

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

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

schemes, and artifices to defraud;  (b) made untrue statements of a material fact and omitted to 

state a material fact 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 or would operate as a fraud and deceit upon purchasers, prospective 

purchasers, and any other persons. 

40. Defendants TexStar and Halsey engaged in the above-referenced conduct and 

made the above-referenced untrue and misleading statements knowingly or with severe 

recklessness.   

41. For these reasons, Defendants TexStar and Halsey violated and, unless enjoined, 

will continue to violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 

C.F.R. § 240.10b-5]. 

THIRD CLAIM 
Violations of Exchange Act Section 16(a) and Rule 16a-3  

[15 U.S.C. § 78o(a) and 17 C.F.R. § 240.16a-3] 
Against Halsey 

 
42. Plaintiff Commission re-alleges and incorporates paragraphs 1 through 33 of this 

Complaint by reference as if set forth verbatim in this Claim. 

43. By engaging in the conduct alleged above, Defendant Halsey violated Exchange 

Act Section 16(a) and Exchange Act Rule 16a-3 [15 U.S.C. § 78p(a) and 17 C.F.R. § 240.16a-3] 

when he failed to make required filings with the Commission on Form 4 to report the changes in 

beneficial ownership of his TexStar Corp stock and, unless enjoined, will continue to violate 

Case 3:16-cv-00450-B   Document 1   Filed 02/17/16    Page 11 of 13   PageID 11



SEC v. Nathan Halsey, et al         Page 12 
COMPLAINT 

Exchange Act Section 16(a) and Rule 16a-3. 

RELIEF REQUESTED 

Plaintiff Commission respectfully requests that this Court: 

(1) Permanently enjoin Defendants Halsey and TexStar from violating Securities Act 

Section 17(a) [15 U.S.C. § 77q(a)] and Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 

10b-5 [17 C.F.R. § 240.10b-5]; 

(2) Permanently enjoin Defendant Halsey from violating Exchange Act Section 16(a) 

[15 U.S.C. §§ 78p(a)] Rule 16a-3 [17 C.F.R. § 240.16a-3]; 

(3) Prohibit Defendant Halsey under Securities Act Section 20(e) [15 U.S.C. § 77t(d)] 

and Exchange Act Section 21(d)(2) [15 U.S.C. § 78l] from acting as an officer or director of any 

issuer that has a class of securities registered under Exchange Act Section 12 [15 U.S.C. § 78l] or 

that is required to file reports under Exchange Act Section 15(d) [15 U.S.C. § 78o(d)]; 

(4) Permanently enjoin Defendant Halsey from directly or indirectly soliciting 

existing or potential investors to purchase or sell securities, provided however, that such 

injunction shall not prevent Halsey from purchasing or selling securities for his own account;  

(5) Order each Defendant to disgorge an amount equal to the funds and benefits 

obtained illegally, or to which the Defendant is otherwise not entitled, as a result of the violations 

alleged, plus prejudgment interest on that amount; 

(6) Order Defendants TexStar and Halsey to pay civil monetary penalties in an 

amount determined appropriate by the Court under Securities Act Section 20(d) [15 U.S.C. § 

77t(d)] and Exchange Act Section 21(d) [15 U.S.C. § 78u(d)] for the violations alleged herein; 

and 

(7) Order such other relief as this Court may deem just and proper. 

Case 3:16-cv-00450-B   Document 1   Filed 02/17/16    Page 12 of 13   PageID 12



SEC v. Nathan Halsey, et al         Page 13 
COMPLAINT 

DATED:  February 17, 2016   Respectfully submitted,  
     
 
 
      s/Timothy S. McCole 
      Timothy S. McCole 
      Mississippi Bar No. 10628 
      James E. Etri 
      Texas Bar No. 24002061 
      Rebecca R. Fike 
      Texas Bar No. 24065228 

United States Securities and Exchange Commission 
      Fort Worth Regional Office 
      Burnett Plaza, Suite 1900 
      801 Cherry Street, Unit #18 

        Fort Worth, TX 76102-6882 
Phone: 817-978-6453 (tm) 
Fax: 917-978-4927 
[email protected]  
 

      ATTORNEYS FOR PLAINTIFF 
      

Case 3:16-cv-00450-B   Document 1   Filed 02/17/16    Page 13 of 13   PageID 13



 
JS 44 Reverse (Rev. 3/99) 

CIVIL COVER SHEET 
The JS-44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by 
law, except as provided by local rules of court.  This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of 
the Clerk of Court for the purpose of initiating the civil docket sheet.  (SEE INSTRUCTIONS ON THE REVERSE OF THE FORM.) 
 
I.(a) PLAINTIFFS 
 
 U.S. SECURITIES AND EXCHANGE 
 COMMISSION 

Defendants- 
Nathan Halsey and TexStar Oil Co., Ltd. 
 

(b) COUNTY OF RESIDENCE OF FIRST LISTED PLAINTIFF__________________ 
                                     (EXCEPT IN U.S. PLAINTIFF CASES) 

County of Residence of First Listed Defendant:      
                (IN U.S. PLAINTIFF CASES ONLY)  Dallas 
NOTE:   IN LAND CONDEMNATION CASES, USE THE LOCATION OF THE 

TRACT OF LAND INVOLVED. 
(c) ATTORNEY (FIRM NAME, ADDRESS, AND TELEPHONE NUMBER) 

Timothy S. McCole 
U.S. Securities & Exchange Commission 
801 Cherry Street, Suite 1900, Unit 18 
Fort Worth, TX  76102-6882  (817) 978-6453 

ATTORNEYS (IF KNOWN) 

J. Randle Henderson, Esq. 
16506 FM 529, Suite 115-107 
Houston, TX  77095-1462 
 

II. BASIS OF JURISDICTION (PLACE AN “X” IN ONE BOX ONLY) III. CITIZENSHIP OF PRINCIPAL PARTIES 
     (For Diversity Cases Only) 
                                       PTF   PTF 

(PLACE AN “X” IN ONE BOX FOR      
PLAINTIFF AND ONE BOX FOR 
DEFENDANT) 

                       PTF   PTF 

 1 U.S. Government 
            Plaintiff 
 

 2 U.S. Government 
            Defendant 

 3 Federal Question             
       (U.S. Government Not a Party) 
 

 4 Diversity 
       (Indicate Citizenship of Parties  
        in Item III) 

Citizen of This State                 1      1 
 
Citizen of Another State           2      2 
 
Citizen or Subject of a              3      3 
  Foreign Country 

Incorporated or Principal Place       4     4 
  of Business In This State 
 
Incorporated and Principal Place     5    5 
  of Business in Another State 
 
Foreign Nation                                    6     6 

IV. NATURE OF SUIT (PLACE AN “X” IN ONE BOX ONLY) 
CONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES 

  110 Insurance 
  120 Marine 
  130 Miller Act 
  140  Negotiable Instrument 
  150  Recovery of Overpayment 

          & Enforcement of Judgment 

    PERSONAL INJURY 
 310 Airplane 
 315 Airplane  Product   

            Liability  
  320 Assault, Libel &  

              Slander 

    PERSONAL INJURY 
 362 Personal Injury - 

     Med. Malpractice 
  365 Personal Injury -  

             Product Liability 

 610  Agriculture 
 620  Other Food & Drug 
 625  Drug Related Seizure of 

            Property 21 USC 881 
 630  Liquor Laws 

 
 422 Appeal 28 USC 156 

 
 423 Withdrawal 

             28 USC 157 

 400 State Reapprotionment 
  410  Antitrust 
 430  Banks and Banking 
 450 Commerce/ICC  

             Rates/etc. 
  460 Deportation 

 151  Medicare Act 
 

   330 Federal 
Employers’  Liability 

  368 Asbestos Personal 
        Injury Product Liability 

  640  R.R. & Truck 
 

PROPERTY RIGHTS  470 Racketeer Influenced  
     and   Corrupt Organizations 

 152 Recovery of Defaulted    
      Student Loans (Excl. Veterans) 
 

 340  Marine 
 345  Marine Product  

             Liability 

PERSONAL PROPERTY 
  370  Other Fraud 
  371  Truth in Lending 

  650 Airline Regs. 
  660 Occupational Safety/Health 
  690  Other 

 820 Copy rights 
 830 Patient 
 840 Trademark 

 810 Selective Service 
 850 Securities     

         Commodities/ Exchange 
 153 Recovery OF Overpayment  

          of Veteran’s Benefits  
 350 Motor Vehicle 

 
  380 Other Personal  

             Property Damage 
LABOR SOCIAL SECURITY  875 Customer Challenge  

           12 USC 3410  
 160 Stockholders’ Suits 
 190 Other Contract 
 195 Contract Product Liability 

 355 Motor Vehicle  
          Product Liability 

 360 Other Personal  
Injury 

 385  Property Damage 
Product Liability 

 710 Fair Labor Standards Act 
 

 720 Labor/Mgmt. Relations 
 

 861 HIA (1395FF) 
 862 Black Lung (923) 
 863 DIWC/DIWW (405(g)) 

 891 Agricultural Acts 
 892 Economic Stabilization  

            Act 
 

REAL PROPERTY CIVIL RIGHTS PRISONER PETITIONS  730 Labor/Mgmt. Reporting &  
            Disclosure Act 

 864 SSID Title XVI 
 865 RSI (405(g)) 

 893 Environmental Matters 
 894 Energy Allocation Act  

 210 Land Condemnation 
 

 441 Voting 
 

 510 Motions to Vacate  
            Sentence 

 740 Railway Labor Act 
 

FEDERAL TAX SUITS  895 Freedom of  
            Information Act 

 220 Foreclosure 
 230 Rent Lease & Ejectment 
 240 Torts to Land 
 245 Tort Product Liability 
 290 All Other Real Property 

 442 Employment 
 443 Housing/                

Accommodations 
 444 Welfare 
 440 Other Civil  

Rights 

               Habeas Corpus: 
 530 General 
 535 Death Penalty 
 540 Mandamus & Other 
 550 Civil Rights 

 790 Other Labor Litigation 
 

 791 Empl. Ret. Inc.  
            Security Act 

 870  Taxes (U.S. Plaintiff or  
             Defendant) 

 871  IRS - Third Party  
             26 USC 7609 

 900 Appeal of Fee  
     Determination Under  
     Equal Access to Justice 

 950 Constitutionality of  
             State Statutes 

 890 Other Statutory Actions 

V. ORIGIN                                                         (PLACE AN “X” IN ONE BOX ONLY) 

 
 1  Original 

         Proceeding 

 
  2 Removed from  

         State Court   

 
 3 Remanded from 

        Appellate Court 

 
 4 Reinstated  or          5 Transferred from       6 Multidistrict                               7 Appeal to District  

         Reopened                   another district                    Litigation                                           Judge from Magistrate 
                                            (Specify)                                                                                        Judge 

VI. CAUSE OF ACTION  (CITE THE U.S. CIVIL STATUTE UNDER WHICH YOU ARE FILING AND WRITE BRIEF STATEMENT OF CAUSE.  DO NOT CITE JURISDICTIONAL STATUTES UNLESS 

DIVERSITY.)    Securities Fraud 

Violations of Section: Section 17(a) of the Securities Act of 1933 [15 U.S.C. § 77q(a)], Sections 10(b) and 16(a) of the Securities Exchange Act 
of 1934 [15 U.S.C. §§ 78j(b) and 78p(a)] Rules 10b-5 and 16a-3 of the Securities Exchange Act of 1934 [17 C.F.R. §§ 240.10b-5 and 240.16a-
3]. 
VII.  REQUESTED IN            CHECK IF THIS IS A CLASS ACTION             DEMAND $                      CHECK YES only if demanded in complaint: 
        COMPLAINT:                UNDER F.R.C.P. 23                                                                                       JURY DEMAND    YES                NO 

VIII. RELATED CASE(S) (See Instructions): 
        IF ANY                                              JUDGE     DOCKET NUMBER  
DATE 
February 17, 2016 

SIGNATURE OF ATTORNEY OF RECORD 
  /s/Timothy S. McCole 

FOR OFFICE USE ONLY 
Receipt #____________ AMOUNT _______________ APPLYING IFP _____________ JUDGE ___________________ MAG. JUDGE _______________________ 

 

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