If you're hoping to strike it rich through promoted investments connected to the U.S. oil boom, use your good judgment.

You could end up with a financial dry hole.

"With energy demands and a desire for energy independence increasing globally, investments in traditional and alternative energy resources are being promoted more often and are becoming attractive to investors and con artists alike," said the North American Securities Administrators Association.

The group, which represents state securities regulators, recently issued an investor advisory warning investors to be cautious when considering investments in traditional and alternative energy offerings.

"Many of these investments are highly risky and illiquid and therefore are not appropriate for many investors," said Heath Abshure, NASAA president and Arkansas securities commissioner. "It is not unusual for unscrupulous promoters to use the lure of current events or innovative technologies to take advantage of unsuspecting investors by engaging in fraudulent practices."

In the group's most recent survey, oil and gas investments were the fourth-most-common products in state securities enforcement cases, with about 40 percent of responding jurisdictions reporting energy-related enforcement cases.

In April, Robbie Dale Walker of Dripping Springs, Texas, was sentenced to 25 years in state prison for stealing money from two Texas women with an oil and gas scam.

The Texas State Securities Board said Walker told the women they could earn annual returns of at least 15 percent from oil and gas projects in North Dakota.

But, the securities board said, "The projects did not exist, and Walker spent investors' money on luxury goods and on improvements, such as a pool and patio, for his mother's house."

Promoters use several tools to offer energy investments, including exchange-traded funds, private placements, partnerships and joint ventures.

The technologies involved include wind, solar, biodiesel, ethanol, coal, oil, gas, hydrogen, wave and geothermal, and liquefied natural gas.

"Many of these investments are highly risky and are usually not appropriate for all investors," the regulators group said. "It is not unusual for unscrupulous promoters to follow the headlines and take advantage of unsuspecting investors by engaging in fraudulent practices."

Abshure said promoters sometimes prey on investors interested in socially responsible products by labeling them as "green energy" investment opportunities.

"The phrase "green energy" implies that the products are ecologically friendly," he said. "In some cases, the promoters may be operating a fraudulent shell company and not producing anything."

Here's how to protect yourself:

• Be wary of something that sounds too good to be true. "Energy investments are highly speculative and subject to the forces of market demand and competition," the regulators association said.

• Before investing, ask questions about the risks and fees involved. Revenue can be negated by fees, such as high sales commissions paid to the promoter or expenses "skimmed off by the managing partner, who typically sets all the rules about who gets paid, how much, in what order and when," regulators said.

• Never invest in something you don't fully understand. "Investors in the energy sector should be extremely cautious and invest no more than they are prepared to lose," the regulators group said.

Pamela Yip is a personal finance columnist for the Dallas Morning News. Readers may send her email at pyip@dallasnews.com; she cannot make individual replies.