Defunct Oil Company Heads Must Face Securities Fraud Class Suit

The co-founders and directors of Dakota Plains Holdings Inc. failed to do away with a securities fraud class action accusing them of manipulating the defunct oil services company’s stock while concealing large equity stakes, a federal court in New York ruled.

Jon D. Gruber and other investors accused Dakota Plains’ co-founders, Ryan Gilbertson and Michael Reger, of concealing their involvement with the company and orchestrating a stock manipulation scheme. Gilbertson was later indicted and sentenced for wire fraud, and Reger paid about $8 million to settle an SEC action against him.

The suit, which also names as defendants directors and ...