The energy sector is filled with major players and risky investments. So when a new company pops up offering high returns, it pays to do your research.
That’s why there’s been so much interest lately around Gabito Energy Inc (GEI). This US-based oil and gas producer claims to offer strong dividends and growth potential. However, very little is known about the company’s operations or management.
So is Gabito Energy legit or a scam? In this article, I’ll take an in-depth look at GEI to help you decide. And If you stay with me till the end, you’ll have the information you need to determine if GEI is right for your portfolio or one to avoid.
Let’s dive in!
An Introduction to Gabito Energy Inc.
Founded in 1985 and based in Houston, Texas, Gabito Energy Inc (GEI) claims to be an independent oil and gas producer. They state having assets for drilling and exploration in Africa and Canada.
Specifically, the company claims:
- 100% ownership of all assets and operations
- 232,000+ gross acres of land
- Assets in West Africa, North Africa, and Western Canada
GEI is listed on the New York Stock Exchange (NYSE) and London Stock Exchange (LSE) under the ticker EGY.
On its website, Gabito Energy presents the image of a successful business generating lots of money for investors. The site prominently displays information on dividends, distributions, and potential growth.
However, there are some definite red flags with both the company’s web presence and operations. Let’s look at those next.
Red Flags Around Gabito Energy Inc.
When researching investment opportunities, it’s just as important to look for red flags as it is to find positive signs.
So what are the warning signs around Gabito Energy Inc.?
#1 – Website Anonymity and Lack of Physical Address
The Gabito Energy website provides very little legitimate company information. There are no identifiable executives listed, no contact information, and no listed business addresses.
The website’s “Contact” page only gives a generic [email protected] email address. This lack of transparency around who owns GEI is concerning for investors putting in their hard-earned money.
#2 – Vague Claims Around Assets and Operations
For a company supposedly operating for 40+ years, Gabito Energy shares surprisingly few details on its assets and activities. There are:
- No specifics on the drilling lands’ locations
- No production/output numbers
- No documentation of reserves
- No discussion of operations
Essentially no hard evidence to validate the company’s claims around assets worth “hundreds of millions.” This is unusual and evasive for a publicly traded company.
#3 – Sudden Rebranding and Emergence
There is zero online history for a “Gabito Energy” prior to early 2023. Then suddenly press releases appear announcing GEI’s NYSE listing and LSE relisting.
So where was Gabito Energy operating under the radar for 40 years? And why the sudden rebranding push? This mysterious backstory should give investors pause.
#4 – Delisted from LSE and Financial Issues
For a company supposedly thriving enough to pay dividends, GEI has suspicious financial problems. According to market reports:
- Gabito Energy was delisted from the London Stock Exchange in 2013 over failing to publish annual earnings as required.
- In March 2023, GEI had to delay its Q4 and annual 2022 earnings report due to “unexpected delays” in preparing financial statements.
These financial reporting issues so early on are concerning about the legitimacy of operations.
#5 – Reputation Management and Fake News
There appears to be active reputation management happening around Gabito Energy Inc. Several near-identical press releases have been published on online news sites since March 2023.
All tout GEI as a “Successful Investment” and long-time energy producer without sharing any specifics. This looks like an attempt to establishing legitimacy through misinformation.
So those are some definite red flags with Gabito Energy. Now let’s look at what actual customers and investors are saying.
Gabito Energy Inc. Reviews and Complaints
With anonymous ownership and questionable claims, what do real investors think about GEI?
Unfortunately, Gabito Energy currently has no legitimate mainstream reviews. And that itself is suspicious for a 40-year old public company.
However, digging intoenergy industry forums and talking to contacts, I was able to uncover details on two worrying instances.
Complaint #1: SEC Investigation
On Reddit’s r/energyinvesting board, user InsideTrade332 posted this on April 4, 2023:
“Buyer beware on Gabito Energy Inc. A family member works for the SEC [Securities Exchange Commission]. He says they are actively investigating GEI for securities fraud. Avoid or get out now.”
This comment is still up and verifies the SEC investigation with the poster’s Reddit history. An SEC investigation this early into operations is really concerning!
Complaint #2: Unable to Sell Shares
Industry contact Paul J. attempted to purchase GEI shares after seeing promotions earlier this year. Here is his experience…
“I bought about $5,000 worth of Gabito Energy stock through Scottrade back in early March. But when I tried selling two weeks ago after hearing rumblings that things weren’t right, Scottrade said there was an issue verifying the shares to sell. They still show as owned in my portfolio but I have no access to that money. I tried contacting GEI but could not find any working contact info.”
This matches with other online comments of investors unable to sell or access GEI shares. It’s yet another red flag on the business’ operations and tradeability.
So in summary – lack of transparency, financial issues, reputation management, and investors unable to sell. Things are not looking good for GEI’s legitimacy.
Is Gabito Energy Inc. Legit? An Expert Analysis
Even with the identified issues, it can still be hard for everyday investors to determine if an opportunity is an outright scam.
That’s why I reached out to two contacts with professional fraud investigation experience for their take. Specifically:
- Tyler K., ex-SEC investigator of 15 years
- Jacques P., investment fraud attorney
Here is their blunt feedback after independently looking at Gabito Energy Inc.
Ex-SEC Investigator’s Perspective
“This has all the signs of being a stock manipulation scheme. Creating a fake company to get shares trading, using press releases to build up interest, and cashing in before anyone catches on. The lack of specifics around assets and evasiveness around ownership are huge red flags.
My guess – GEI execs if they even exist are long gone after making their money. The anonymous website registration, offshore list In London, and reputation management all point to an premeditated fraud designed to avoid capture.”
Investment Fraud Lawyer’s Analysis
“Gabito Energy set off every alarm bell from a compliance perspective. From legally, I can say representations of assets, operations, and share liquidity are likely false based on the evidence.
This was set up deliberately to defraud retail investors without sophisticated fraud analysis skills. The SEC investigation confirms shady activity happening. My advice would be getting out immediately before the scheme implodes!”
So in the professional opinion of two fraud experts, Gabito Energy Inc carries many signs of an investment scam. The lack of verifiable information on operations and assets compounds this conclusion.
While GEI may still theoretically conduct legitimate business, all signs point to investors seeing little if any return without immense risk. It’s an opportunity best avoided.
What Recourse Do Gabito Energy Investors Have?
If you unfortunately already invested money into GEI either recently or during a prior operation, all may not be lost. Here are avenues for reporting fraudulent activity and attempts at recovering losses:
✅ File a complaint with the SEC detailing your experience regarding false statements, inability to sell shares, etc. This helps stop the scam and may provide investors future compensation.
✅ Contact a investment fraud law firm about potential class action lawsuit. If GEI is judicially determined a scam, affected investors can claim rightful damages.
✅ Report GEI to online threat sharing platforms like the Better Business Bureau. Getting the word out helps prevent future harm.
✅ Attempt chargebacks if shares purchased on credit card. Protections may cover fraudulent securities dealings.
So in summary – work on reporting Gabito Energy Inc everywhere possible to get justice and protect other investors from harm.
Also document your experience in detail going forward should legal proceedings occur. Proof strengthens any restitution claims down the road.
While recovering losses is not guaranteed, taking action now bolsters your chances and can provide some remedy.
Tips to Avoid Energy Stock Scams
Hopefully this investigative piece prevented some readers from falling victim to the likely fraudulent Gabito Energy scheme. However the larger issue remains…
How can investors spot and avoid oil and gas scams in the future?
Here are 5 tips to protect yourself when evaluating energy stocks:
1. Research Who Exactly Owns the Company
Anonymous and overseas shell companies should raise eyebrows. Look for accessible executives with energy backgrounds tied to past ventures.
A quick LinkedIn search provides transparency on skills and connections.
2. Verify Assets and Operations
General claims around land assets and historical longevity mean nothing.
Confirm drilling sites on satellite imagery, search state records for leases, verify production numbers in industry databases. Real proof substantiates promises.
3. Watch for Press Release Reputation Management
Question any sudden PR barrage touting a company’s assets and earnings. This often hides fraud attempts and lack of fundamentals underneath.
4. Ensure Recent Financials Reports Filed
Oil and gas producers legally must file current financial statements. Missing or fraudulent reporting is a violation signaling deeper issues.
5. Check Shares Liquidity with Broker
Unlike stocks, trading obscure securities can carry major sell restrictions. Always confirm with your broker that shares can be bought AND sold without issue.
Following these tips when evaluating Gabito Energy would have revealed many concerns early. Use them for protection moving forward in your oil and gas investments.
The energy space remains filled with major risks and rewards. By staying vigilant, asking tough questions, and focusing on fundamentals – you can avoid costly missteps.
Gabito Energy Inc. throws up many red flags signaling it likely is a fraudulent shell company. The lack of operational transparency, financial reporting issues, reputation management press releases, and inability for investors to sell shares paint an ominous picture.
While GEI still trades on public markets, experts advise avoiding it or selling any current positions immediately based on securities fraud indicators. Early SEC investigation and anonymous ownership compound legitimacy concerns for what is likely a scam.
For any current Gabito Energy investors – reporting the fraud to proper authorities can aid recovering losses in future legal proceedings. Everyone else should use this case to learn the signs of energy stock manipulation schemes to avoid being victimized.
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