State orders Ogdensburg company to pay $1.1M fine

OGDENSBURG — The New Jersey Bureau of Securities has leveled a $1.1125 million fine against Ogdensburg-based Extreme Energy Solutions after finding the company and its president and Chief Executive Officer Samuel K. Burlum engaged in the fraudulent sale of unregistered stock, warrants, and promissory notes, and misled investors through false statements and omissions of material fact, among other violations.

“The Bureau of Securities Chief found that Burlum misled investors with a series of lies about his company’s current and future prospects for success,” Acting Attorney General John J. Hoffman said. “This $1.1 million civil penalty will serve as a deterrent and a clear reminder that we are watching, and that investors must also do their homework before investing.”

Burlum and EES may request a hearing within 15 days of receiving the Summary Order and Cease and Desist, by filing a written answer and request for a hearing

According to the findings of Bureau of Securities Chief Laura H. Posner, Burlum reached prospective investors in part through his membership in a group called the Global Information Network, an Illinois-based organization that describes itself as a “unique success club” whose members help each other achieve wealth, gain financial freedom, experience dynamic health, and reach high levels of overall emotional well-being.

“According to the Bureau of Securities’ findings, investors bought EES stock and other unregistered securities based on false representations about the company’s value, including that it was preparing for an initial public offering and had turned down a $300 million purchase offer,” Division of Consumer Affairs Acting Director Steve Lee said.

According to the Bureau of Securities, Burlum and EES violated New Jersey’s Uniform Securities Law through the following activities, among others.

Agency officials said from at least March 2011 until August 2014, Burlum and EES sold at least $2.8 million worth of unregistered securities through the fraudulent offer and sale of EES common stock, common stock purchase warrants, and promissory notes to at least 225 investors, many of whom were members of the Global Information Network.

None of the EES securities were registered with the Bureau of Securities, nor were they exempt from registration, officials said. In addition, Burlum has never been registered with the bureau to sell securities. EES employed at least 14 unregistered agents, including Burlum, to sell the unregistered securities. Many, like Burlum, also were members of the Global Information Network.

Burlum solicited Global Information Network members and others to invest in the EES Stock and Warrants through presentations at EES convention-type meetings and monthly investor conference calls, among other methods, the bureau said. These presentations resulted in Global Information Network members investing in EES stock and warrants.

Burlum and EES deceived prospective investors through various untrue statements and omissions of material fact.