A Boston oil investment firm that has tried to sell heating oil contracts to Washington area investors has been shut down temporarily by a Massachusetts court.
Ramco Petroleum Inc. was ordered to stop selling oil investments after the Massachusetts Secretary of State's Office accused the firm of selling unregistered securities and violating the state's consumer protection law.
The court also issued an order preventing the firm from disposing of its assets and attaching more than $400,000 in the firm's Boston bank account.
The complaint against Ramco Petroleum was filed by Massachusetts investigators who are working with the federal Commodity Futures Trading Commission and authorities in several other states on a nationwide probe of oil investment frauds.
Working by telephone, the oil investment companies allegedly have promised large profits to investors who order fuel oil now for delivery next spring. The oil investment companies have charged commissions ranging from $5,000 to $7,000 on a $1,000-barrel heating oil order. With commissions that large, the price of oil must jump even more than the latest Organization of Petroleum Exporting Countries price increase before investors can make a profit, investigators warn.
Although they are called other names by their sellers, the oil investments amount to futures contracts or commodity options, federal regulators claim. The CFTC has banned the sale of must commodity options and limits futures contract trading to registered exhcanges. Only the New York Mercantile Exchange is legally authorized to trade heating oil futures; its commissions are less than $100 per order.