Commission Halts Unregistered Activity by Arizona Gold Processing, LLC, Azgo, LLC, Energy Exchange Inc. d/b/a The Energy Exchange, and David H. Mangum

HARRISBURG, Pa., Sept. 21, 2012 /PRNewswire-USNewswire/ -- To halt the offer and sale of unregistered securities in Pennsylvania, the Pennsylvania Securities Commission (Commission) issued a Summary Order to Cease and Desist against Arizona Gold Processing, LLC (AGP) and Azgo, LLC (Azgo), both entities with addresses in Provo, Utah and Houston, Texas, Energy Exchange, Inc. d/b/a The Energy Exchange (Energy), an entity with an address in The Woodlands, Texas, and David H. Mangum (Mangum), an individual with an address also in The Woodlands, Texas. AGP was offering for sale limited liability company membership interests (Interests) in AGP. Azgo was the manager of AGP. Energy was offering Interests for sale, and Mangum was the president of Energy.

In or about September 2012, a representative (Representative) of Energy cold-called at least one Pennsylvania resident (PA Resident) and offered the Interests for sale.  The Representative told the PA Resident that AGP had new technology that made mining for gold and other metals more profitable.  The Representative also directed the PA Resident to a website at www.arizonagoldprocessing.com (Website) and gave the PA Resident a username and password to be used to access offering materials (Materials), including subscription documents, a Private Placement Memorandum, and an Investment Overview.  The Representative stated that the PA Resident would receive a 100% return in nine months and that investors could expect a five to one return on their investment.

The PA Resident viewed the Materials on the Website.  The Materials state that AGP is offering up to 100 Interests at a cost of $16,750 per Interest and a total capitalization of $1,675,000; that the minimum investment is $33,500 for two Interests but the manager has the discretion to waive this minimum; and that AGP will return 100% of the net profits to the investor until 100% of the investor's original investment has been returned.  The Materials also state that after the original investment has been returned, 75% of the net profits will be distributed to the investor until 200% of the investor's original investment had been returned and then 50% of the net profits would be paid to the investor until 500% of the investor's original investment had been returned. After an investor has received 500% of his original investment, he would no longer be paid a return. The Materials state that Azgo is the manager of AGP; and that the day-to-day affairs of AGP will be controlled and directed by Azgo with investors having no "voting rights or degree of control over the management" of AGP's business affairs or operations.

The PA Resident had no substantive, pre-existing relationship with AGP, Azgo, Energy, Mangum, or with the Representative. The PA Resident was not an accredited investor under Rule 501 of Regulation D and did not have sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the investment.

The Commission ordered Arizona Gold Processing, LLC, Azgo, LLC, Energy Exchange Inc. d/b/a The Energy Exchange, and David H. Mangum to immediately Cease and Desist from offering and selling the Interests in the Commonwealth of Pennsylvania, in violation of the 1972 Act, and, in particular, Sections 201 and 301 thereof. 

Any further solicitations or sales made by AGP, Azgo, Energy, Mangum, or their affiliates in Pennsylvania will constitute further violations of the 1972 Act.  Any person who is solicited by or has information about AGP, Azgo, Energy, or Mangum is asked to immediately notify the Pennsylvania Securities Commission by calling the toll-free line 800-600-0007 (PA only); in Harrisburg: (717) 787-8061; in Pittsburgh: (412) 565-5083; or, in Philadelphia: (215) 560-2088. 

SOURCE Pennsylvania Securities Commission (PSC)