In the spirit of being conservative and fully disclosing all material facts, oil promoters should abide by all federal and state securities laws when soliciting units in limited partnerships or other investment vehicles. I am not a securities attorney, but will try to educate investors as best as possible going forward on proper procedures for operators. Through research, discussion with state regulators, and securities attorneys, I hope to shed some light on unfair practices in the direct participation oil & gas business. The problem is that promoters often profit even before drilling a hole due to skewed costs presented to unknowing investors. There is nothing I hate more than a liar and crook.

In fairness to my readers, this is especially important to me since I have been directly affected by improperly prepared offering memorandum. Prior to becoming a direct oil & gas investor, I was also a passive investor with an operator. The result of the findings of the federal and state regulators is still pending, but could have serious consequences for me as an investor. This wake up call has led me on a mission to learn as much as possible about proper private placement offerings. I hope to be the most compliant operator, if and when I ever raise money. At first glance, the state of Kentucky seems to have an excellent process for operators registering securities to be sold in their state. I have contacted the Securities Division in KY and have forwarded some interview questions for future articles.

Also, I have found a very comprehensive site for investors to research potential partners in the industry. The Venture Research Institute seems to be the most informative website on oil & gas fraud I have found: http://www.vcresearch.info/open/forums.asp. I will also be looking to interview Bernie Bicoy, in admin at the site, for upcoming articles. Bernie Bicoy takes an objective view on the investigative process and has assembled a fantastic collection of information for prospective investors.

It seems as though there needs to be a concerted effort by federal and state regulators to create a uniform "Best Practices" test. Knowing how government works, I would not bet on that, therefore, it should be that promoters go above and beyond to provide full disclosure. Promoters should take the time to introduce themselves to the securities laws in the states they are offering securities and look to go above and beyond to be good corporate citizens. I know for sure I will strive to achieve that level of responsibility as a future operator.