With oil prices near US$40 a barrel because of supply shortages and Mideast war fears, U.S. securities regulators are on the lookout for an increase in oil and gas scams.

Regulators in at least seven states — Kansas, Kentucky, Ohio, Oklahoma, Texas, Washington and Wisconsin — have recently taken actions against investment promoters pushing oil and gas schemes and they worry that news of high oil prices could make investors more vulnerable to crooks. “Con artists always use the headlines as a way to get into investors1 wallets — and everyone knows oil prices are up because they can see it at the gas pump and in their heating bills,” said Christine Bruenn, president of the North American Securities Administrators Association.

Regulators worry that a desire to cash in on rising oil prices may lure investors into unsuitable or fraudulent oil and gas ventures. The cost of heating oil is up 50% during the past year, according to the U.S. Department of Energy.

“Speculation on oil and gas wells is risky business no matter what is going on in the rest of the world,” said James Ropp, chair of NASAA’s enforcement section. He urged investors to beware of cold callers; read carefully any written material provided; and, before investing, call their securities regulator to determine if the investment and the promoter are properly licensed and registered.