The Prudential Oil and Refining Company, organized in 1917 with $3 million capitalization, was a stock scam executed by Seymour E. J. “Alphabet” Cox, a notorious oil promoter and ad-man who was pilloried in the press for his unscrupulous schemes.
United States Investor magazine reported on May 10, 1919, that Prudential Oil and Refining stock was then selling for about four cents per share via Cox’s Prudential Securities Company.
“We would hate to pay even that small amount for it,” the publication noted.
Cox was described as “the author of some clever literature which holds a lure to the uninitiated (but) without further comment on his golden promises, we would advise that you find more substantial ways than this for placing your money.”
In an article entitled, “Pirates of Promotion,” The Worlds Work magazine quoted Cox extolling the virtues of a breakthrough mechanical technology – which did not, and still does not, exist.
“During the last four months the Prudential Oil and Refining Company has been in control of a machine which locates the oil,” the magazine quotes one Cox promotion, “thus eliminating every possibility of failure that has formerly been the bugaboo of the oil business…It is almost impossible for the human mind to conceive of the money in unlimited millions of dollars that will come to the coffers of the Prudential Oil and Refining Company as a result of this machine.”
Cox will be indicted with Frederick Cook – who falsely claimed to be the first man to reach the North Pole – in federal investigations of another stock scam involving the Petroleum Producers’ Association. See Arctic Explorer Turns Oil Promoter.
Convicted for using the U.S. mail to defraud, in January 1924 Cox is sentenced to five years in jail and fined $15,000. Stock certificates from Prudential Oil and Refining Company have been posted on E-Bay, selling for about $30.
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The stories of exploration and production companies joining petroleum booms (and avoiding busts) can be found updated in Is my Old Oil Stock worth Anything? The American Oil & Gas Historical Society preserves U.S. petroleum history. Please support this AOGHS.ORG energy education website. For membership information, contact bawells@aoghs.org. © 2018 Bruce A. Wells.