A Canadian, C.C. (Courtney Chauncey) Julian, formed the Julian Petroleum Company in May 1923 in Los Angeles.
After witnessing the excitement created by the state’s booming petroleum industry, Julian created a vast Ponzi scheme camouflaged as an investment opportunity. Julian bilked millions of dollars from eager investors through aggressive sales and a continuous newspaper advertising blitz.
In what became known as the “Julian Pete Scandal,” the con man by April 1927 had peddled almost four million worthless stock certificates. There are many newspaper and magazine articles – and at least one book – about the Julian Petroleum Company and the swindle “that rocked Los Angeles.”
As Julian’s fraud collapsed, a well-known Los Angeles lawyer, Joseph Scott, was appointed by the court to serve as receiver along with H.L. Carnahan, a former California Corporation Commissioner. Scott and Carnahan created Sunset Pacific Oil Company from the remains of Julian Petroleum Company.
Sunset Pacific failed with $12 million in debt to Associated Oil Company (see AOGHS stock list) and was ultimately reorganized into Sunset Oil Company in 1934. Shareholders of the former company received common stock shares in the new, with the former certificates cancelled. Learn more in the 1994 book The Great Los Angeles Swindle by Jules Tygiel.
The stories of exploration and production companies trying to join petroleum booms (and avoid 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 firstname.lastname@example.org. © 2018 Bruce A. Wells.