PRESS RELEASE
Civil Action Filed Against Jerry D. Cash
 
For Immediate Release
Friday, August 29, 2008 
 
Contact: Oklahoma Department of Securities
 
  405-280-7700
 
 
Oklahoma City/////  The Administrator of the Oklahoma Department of Securities filed a civil action today in Oklahoma County District Court against Jerry D. Cash, Chief Executive Officer and a director of Quest Resource Corporation (Quest). The principal offices of the company are located in Oklahoma City. The Department alleged that Cash transferred funds from Quest and at least one of its affiliates (the “Quest Affiliate”) to Rockport Energy, LLC, a Texas limited liability company controlled by Cash. The funds were then used by Cash for his personal benefit. “This action was filed in order put a stop to the Defendant’s fraudulent activity and to prohibit future violations of the securities laws of this state,” said Irving L. Faught, Administrator of the Department of Securities.

Cash is specifically alleged to have engaged in a series of suspicious financial transactions between Rockport Energy and Quest or the Quest Affiliate. On or within a day of the end of each fiscal quarter, Cash issued a check drawn on the Rockport Account, made payable to Quest, or the Quest Affiliate, in amounts that ranged from Four Hundred Thousand Dollars ($400,000) to Ten Million Dollars ($10,000,000). Cash then deposited the check into a bank account of the payee. At all times material hereto, the balance in the Rockport Account at the time each check was deposited was never sufficient to cover each check and rarely exceeded Two Thousand Dollars ($2,000.00).

The day following the end of each fiscal quarter, Cash directed that funds of Quest, or the Quest Affiliate, be wired back to the Rockport Account. Each wire was in an amount identical to the amount of the recently issued check from Rockport Energy, thereby, enabling each of the Rockport Account checks to be paid by the bank.

Without admitting or denying the allegations, Cash consented to the issuance of a temporary injunction and an order freezing his assets.

The Administrator of the Oklahoma Department of Securities is charged with the administration and enforcement of the Oklahoma Securities Act. The Department investigates securities fraud, the offer or sale of unregistered securities, and the sales practices of stockbrokers and investment advisers. The Administrator may seek administrative or civil sanctions against any person who violates state securities regulations and, when appropriate, make criminal referrals.
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This press release, and related information, is available on the Securities Commission's web site at securities.ok.gov, by phone at (405) 280-7700, or in writing at:  Oklahoma Securities Commission, 204 North Robinson, Suite 400, Oklahoma City, OK 73102.