A $17 million investment fraud built around a Texas oil-and-gas company has left a trail that reaches from a convicted securities fraudster in federal prison to a Chicago wealth-management firm whose former representatives are now facing a separate Securities and Exchange Commission case. At the center of that second case is Arete Wealth Management, its affiliated investment adviser Arete Wealth Advisors, former representatives Joey Dale Miller, Jeffrey Scott Larson and Randall Scott Larson, and former chief compliance officer and general counsel UnBo “Bob” Chung. The SEC filed its civil complaint on January 17, 2025, alleging unauthorized securities sales, investor deception, compliance failures and efforts to obtain liability releases from clients after the Zona Energy problem surfaced.
The underlying story begins with Zona Energy Inc., a privately held Texas company that marketed itself as an oil-and-gas business focused on acquiring and developing unconventional reserves in the Permian Basin. The SEC later alleged that Zona was a sham and that its principal, Richard Dale Sterritt Jr., used the name “Richard Richman” to conceal a prior securities-fraud conviction. Between March 2018 and at least November 2020, Sterritt and his associates raised more than $16 million from more than 300 investors through what the SEC described as unregistered and fraudulent securities offerings. Federal prosecutors later put the total at approximately $17 million.
Sterritt’s conduct is no longer simply an allegation. He pleaded guilty in November 2023 to conspiracy to commit securities and wire fraud, securities-fraud counts and conspiracy to commit money laundering. In June 2025, a federal judge sentenced him to 18 years in prison and ordered him to forfeit approximately $17 million and pay about $16.3 million in restitution. Prosecutors said more than $10 million of the investor money was misappropriated for luxury purchases, personal expenses and transfers to other businesses Sterritt controlled, including a cannabis company. His earlier criminal history was also real: in 2003 he pleaded guilty to federal charges involving securities fraud, money laundering and false tax returns and received a five-year prison sentence.
The connection to Arete developed in late 2018. According to the SEC complaint, Michael Sealy introduced the opportunity to Joey Miller, who then brought in Jeffrey Larson, who in turn brought in his brother Randy Larson. Miller was 47, Jeffrey Larson 41, Randy Larson 43 and Chung 53 when the SEC filed its complaint in January 2025. The complaint says Miller and Jeffrey Larson reached an agreement with Sterritt to raise money for Zona in return for discounted shares, while Randy Larson joined the fundraising effort. The SEC says Miller and Jeffrey Larson did not tell clients about that arrangement.
What makes the case particularly significant is the amount of money involved. The SEC alleges that Arete’s representatives ultimately helped bring more than $8.5 million into Zona—more than half of the total money raised. Approximately 120 Arete customers or clients were identified as Zona investors: about 60 associated with Miller, 40 with Jeffrey Larson and 20 with Randy Larson. The complaint says investors eventually lost nearly all of the money they put into Zona.
The SEC characterizes the sales as “selling away,” meaning securities were sold by registered representatives outside the supervision and approval of their broker-dealer. That distinction matters because the point of the supervisory system is to ensure that a brokerage firm knows what securities its representatives are recommending and can perform due diligence and monitor conflicts of interest. The SEC says Arete had not approved Zona for sale and that the representatives used personal phones and non-Arete email accounts to communicate with investors. Court filings describe messages in which the representatives discussed raising capital and moving conversations away from company systems.
The allegations go beyond unauthorized sales. The SEC says Miller and Jeffrey Larson made statements to investors about Zona while failing to disclose that they had received discounted shares in connection with their fundraising. A February 2026 federal court ruling found that those allegations were sufficiently plausible to proceed. The court pointed specifically to allegations that the representatives had received discounted stock and that this benefit could have been material to investors evaluating their recommendations.
The case then took another turn after Arete management learned that clients had invested in Zona. The SEC alleges that the company’s CEO required the representatives to obtain releases from affected customers and delegated oversight of the process to Chung. According to the complaint, more than 100 clients signed releases after receiving payments that commonly ranged from $1 to $5,000. By September 2021, the representatives had paid approximately $650,000 to clients who signed, although 91 of roughly 103 recipients received $5,000 or less.
The SEC says those releases created a second compliance problem. They allegedly stated that investors understood the representatives had not recommended Zona and were not acting as financial advisers when they did so. The documents disclosed that Miller and Jeffrey Larson had bought Zona shares at discounted prices but, according to the SEC, did not adequately explain that the discounted shares were connected to raising millions of dollars for Zona. The releases also purported to waive broad categories of claims. The SEC alleges that this could have misled clients about rights that could not legally be waived.
Chung, who had previously worked as a senior regional counsel for FINRA before joining Arete, is accused by the SEC of aiding and abetting certain violations and of failing to ensure that Arete maintained adequate compliance policies. The complaint says SEC staff had already warned Arete in 2018 that its compliance policies were inadequate, including deficiencies concerning outside business activities. The court found in February 2026 that the SEC had plausibly alleged a compliance violation involving the failure to correct those deficiencies for more than four years.
Arete also had an earlier regulatory history relevant to the SEC’s case. The 2025 complaint says the firm was sanctioned by NASD in 2000 and by FINRA in 2012. In the 2012 matter, FINRA censured Arete and fined it $25,000 after finding that it had approved a private offering without adequate due diligence and had failed to adequately document due diligence in several private offerings. Arete accepted the 2012 sanctions without admitting or denying FINRA’s findings.
The company’s alleged recordkeeping problems became another major part of the 2025 case. The SEC says employees, including senior personnel, used personal phones for business communications that were not retained as required. The February 2026 court decision allowed the recordkeeping claim against Arete Wealth to proceed, noting allegations involving thousands of business-related text messages that were not preserved. The court also rejected most of the defendants’ attempts to dismiss the case, although it dismissed some portions of several claims and one claim in full.
None of the six Arete defendants has been convicted of the Zona-related conduct described in the SEC case. This is a civil enforcement action, not a criminal prosecution, and the February 2026 ruling did not determine that the alleged misconduct was ultimately proven. The defendants sought dismissal and challenged the SEC’s theories. The court’s ruling therefore represents a finding that most claims were legally sufficient to continue, not a final judgment of liability. As of September 22, 2026, the case remains pending, with the SEC seeking injunctions and monetary penalties and, for Miller and the Larsons, restrictions that could include industry and penny-stock bars.
The people named in the case have not simply disappeared from the financial industry. Miller left Arete in October 2023 and is currently associated with DAI Securities and DAI Wealth, with public regulatory records placing his professional base in New Braunfels, Texas. His John Galt Wealth Solutions website continues to identify him as an adviser and partner. Jeffrey and Randy Larson left Arete in October 2023 and are currently associated with 25 Financial in St. Louis; current SEC/FINRA records show both as investment adviser representatives. Chung is no longer registered as a broker according to his 2026 BrokerCheck record, after his Arete registration ended in February 2026.
There are other disclosures in the representatives’ regulatory histories, including customer disputes and employment disclosures, but those matters should not be conflated with the Zona allegations or treated as proof of misconduct. For example, FINRA records show customer disputes involving Jeffrey and Randy Larson, while Miller’s record contains additional disclosures. Such entries represent allegations, settlements or regulatory events of varying kinds and must be read according to their individual dispositions.
Another individual connected to the episode, Michael Sealy, resolved an SEC administrative case without admitting or denying the agency’s findings. The SEC said Sealy acted as an unregistered broker in connection with Zona sales. He agreed to a cease-and-desist order, a $200,000 civil penalty and a 12-month suspension from participating in penny-stock offerings.
The broader Zona prosecution has produced actual criminal convictions, guilty pleas and prison sentences, but those outcomes belong to Sterritt and his co-conspirators rather than the Arete defendants. Federal prosecutors said all six defendants in the criminal case ultimately pleaded guilty; Sterritt received 18 years, while Robyn Straza received 10 months and Mark Ross three months, with other defendants awaiting sentencing as of the Justice Department’s June 2025 update.
The larger lesson is not limited to one failed oil-and-gas company. The Zona story illustrates how a private investment can move from a promoter to trusted financial professionals, how conflicts can become difficult for investors to see, and why supervision and recordkeeping exist in the first place. The SEC case against Arete and its former representatives is still being fought, so the final legal conclusions have yet to be written. But the underlying criminal case has already established that the central promoter used a false identity, pleaded guilty to a multimillion-dollar securities fraud and received a lengthy federal prison sentence. For investors, the distinction is crucial: trust in a financial professional does not replace independent verification, and a familiar adviser does not make an unapproved private offering safe. The unanswered question in the Arete litigation is how much responsibility belongs not only to the people who promoted Zona, but also to the systems that were supposed to detect, supervise and record what they were doing.
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