U.S. Securities and Exchange Commission

Litigation Release No. 20694 / August 28, 2008

SECURITIES AND EXCHANGE COMMISSION V. AMERICAN ENERGY RESOURCES CORP., H&M PETROLEUM CORP., AND DONALD H. ALLEN, Case No. 08-CV-01847 REB BNB (UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO).

The Securities and Exchange Commission announced today that it filed a civil action in the United States District Court for the District of Colorado against Donald H. Allen, a resident of Colorado Springs, Colorado, and his two wholly-owned companies, H&M Petroleum Corporation (“H&M”) and American Energy Resources Corporation (“AER”), for violations of the antifraud and registration provisions of the federal securities laws.

In its Complaint, the Commission alleges that, between March 2002 and December 2006, Allen, H&M, and AER raised approximately $9.9 million from at least 355 investors nationwide through a series of unregistered offerings of fractional interests in oil and gas projects. These projects were marketed to the public through cold call telephone solicitations and “seminars” advertised in local newspapers. According to the Complaint, Allen, H&M, and AER defrauded investors by using investor funds for undisclosed purposes, including diverting over $2.3 million to Allen’s personal use. The defendants also misrepresented or omitted material information about their track record, projected return on the investments, and their own investment in the offerings. The Complaint further alleges that Allen, AER, and H&M violated the securities registration provisions of the federal securities laws and that Allen acted as an unregistered broker-dealer.

Allen, AER, and H&M agreed to settle the SEC’s charges without admitting or denying the allegations in the Complaint. These settlements are subject to approval by the court. Allen, AER, and H&M agreed to be permanently enjoined from violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Allen further agreed to be permanently enjoined from violating Section 15(a) of the Exchange Act. Allen, AER, and H&M agreed to jointly and severally pay $510,000 of disgorgement and additionally pay the costs of distributing these funds to harmed investors.

http://www.sec.gov/litigation/litreleases/2008/lr20694.htm