Northamerican Energy - SEC Seeks Receiever

On August 11, 2010, the U.S. Securities and Exchange Commission filed a complaint in the United States District Court for the Southern District of Texas, Houston Division seeking emergency relief including the appointment of a receiver, against Houston resident Jon C. Ginder ("Ginder") and two related oil and gas companies, Northamerican Energy Group, Inc. ("NEG") and Northamerican Energy Group Corp. (NEGC). The complaint alleges that from February 2008 to May 2010, the defendants fraudulently raised approximately $3.5 million from over 50 investors nationwide through unregistered oil and gas limited partnership offerings. Investors were solicited through television advertisements touting annual returns as high as 40% from low risk producing wells. The estimated returns were purportedly based upon historical oil and gas data. In fact, the complaint alleges that historical oil and gas production from the leases in the first two partnership offerings was very poor, and many of the wells had no recent production history.