According to the Texas State Securities Board, years before Mark Christopher Parman of Frisco started selling investments in oil and gas projects, he had been sanctioned by regulators, ordered to pay $2 million in restitution to previous investors and clients, and filed for bankruptcy.
Now add convict to Parman’s resume. He was sentenced to six years in state prison on April 7 after pleading guilty to securities fraud in the 199th State District Court in Collin County.
Parman sold interests in oil and gas drilling projects in Grayson and Brazoria counties in Texas and Jefferson Davis Parish in Louisiana. He raised approximately $850,000 from investors. Parman promised investors he would use their money to pay for oil-and-gas development projects, but instead used funds to pay for his and his wife’s personal expenses.
Parman committed securities fraud by not disclosing his past sanctions and legal proceedings to investors to allow them to make an informed decision.
Parman’s legal troubles included:
- In 2003, Parman and Shelman Securities Corp., where he was chairman of the board, were ordered to pay $1.7 million in restitution to individuals who were sold limited partnership offerings in an investment fund. The arbitration, conducted by the National Association of Securities Dealers (NASD, now the Financial Industry Regulatory Authority), revoked Shelman Securities’ license as a broker-dealer and Parman’s license as a securities dealer;
- A second NASD arbitration proceeding in 2004 awarded $311,572 to an investor who filed a complaint against Shelman Securities and Parman. The complaint alleged excessive trading to generate commissions, a practice known as churning;
- Also in 2004, the Colorado Securities Commissioner revoked the broker licenses of Parman and Shelman Securities to sell securities in Colorado;
- Parman in 2005 filed for Chapter 7 bankruptcy in the Northern District of Texas, Dallas Division; and
- Parman was briefly jailed for contempt of court in 2005 in Collin County after refusing to answer discovery questions from a plaintiff who sued Parman and a business associate for not paying a debt.
In the securities fraud case, the oil and gas projects were supposedly managed by Intercontinental Energy Inc., a company Parman controlled. Neither the company nor Parman were registered to sell the investments.
Attorneys in the Enforcement Division of the Texas State Securities Board assisted the Collin County District Attorney’s Office in prosecuting the case.