Securities fraud litigation bubbles up with the oil in the Bakken. For example, the U.S. District Court for the Southern District of New York was presented with the question whether defendant Eric Dany, an established stock commentator with his own “Stock Prospector” brand and newsletter, could be held responsible under the SEC’s Rule 10b-5 as the “maker” of allegedly misleading statements about the stock of Norstra Energy Inc., a would-be Bakken player. A third party paid Dany for the use of his name in publishing a statement in promotional materials:
My name is Eric Dany. I’m editor and publisher of Eric Dany’s Stock Prospector, Main Street Research . . . Now I’m predicting that NORX could be my best ever call! I believe the company’s estimated 8.5 billion barrels of oil in place could easily fetch $25 a share in a takeover! Act now, before a takeover move, and you could make a fortune! . . . Don’t wait! As you’ll see when you read on, I believe one of the majors may be reading a takeover offer that, the minute it leaks out, could send this stock flying!
The SEC sued Norstra Energy, its CEO, and Dany, alleging the statement (and others) was misleading. Exchange Act Rule 10b-5(b), 17 C.F.R. § 240.10b-5(b), prohibits making untrue statements of material fact in connection with the purchase or sale of securities. Dany argued that, as a matter of law, he could not be held responsible because he did not “make” the statement, since it was published by someone else.
The Supreme Court decided in 2011 that “[f]or purposes of Rule 10b-5, the maker of a statement is the person or entity with ultimate authority over the statement.” Accordingly, showing that someone else published an allegedly fraudulent statement is not enough to escape responsibility. If a defendant had ultimate authority over it, he can be liable. In Norstra Energy, the district court concluded the evidence at minimum created a question for a jury to decide whether Dany was a “maker” of the statement, since the statement was attributed to Dany, he signed a contract agreeing to participate in the promotional campaign, and he provided no evidence that he did not want the statement to be attributed to him.
The Norstra Energy ruling allowed the SEC to pursue those who rent out their names for stock promotion uses by others. It also serves as yet another example: no matter how many old energy industry beliefs the Bakken and well-fracking oil rush turned upside down, the same old securities laws continue to apply to companies affected by the boom and those who seek to profit from them.
 Janus Capital Group, Inc. v. First Derivative Traders, 564 U.S. 135 (2011)(slip opinion at 6).