October 31, 2016

The SEC charged Ryan Gilbertson, co-founder of Minnesota-based energy company Dakota Plain Holdings, with manipulating its stock price and concealing his control of the company to attain lucrative financial payouts.  Gilbertson co-founded Dakota Plains with Michael Reger, who has agreed to pay $8 million to settle related charges brought by the SEC.  The SEC alleges that Gilbertson hatched and orchestrated a scheme to secretly siphon millions of dollars from Dakota Plains by installing his father and Reger’s father as figurehead executives of the company, allowing them to secretly wield control of the company and issue millions of shares of stock to themselves, friends, and family.  They allegedly caused the company to enter into an agreement to borrow money from them on generous terms that included extra bonus payments to them based on the price of Dakota Plains stock after 20 days of trading following a reverse merger into a company with publicly-traded shares.  According to the SEC’s complaint, Gilbertson enlisted friends and associates to choreograph extensive sales and purchases of Dakota Plains stock, causing the price to skyrocket from $0.30 to $1.10 per share during the 20-day period.  The inflated stock price obligated Dakota Plains to make bonus payments totaling $32 million to Gilbertson, Reger, and others.  Reger will pay $8 million to settle charges that he obtained illicit payments and skirted public disclosure requirements by spreading his Dakota Plains stock holdings among 10 accounts in different names to conceal that he owned more than one-fifth of the company’s shares.  SEC

Tagged in: Securities Fraud,