Corporate & Securities Law

SNSFE attorneys are investigating Provident Royalties, LLC after the Securities and Exchange Commission obtained an emergency asset freeze.  The SEC alleges a $485 million offering fraud and Ponzi scheme orchestrated by three Dallas businessmen through Provident Royalties.

The SEC alleges that from at least June 2006 through January 2009, Provident made a series of fraudulent securities offerings involving oil and gas assets through 21 affiliated entities to more than 7,700 investors throughout the United States.  Provident's entities made some direct retail sales of securities, but primarily solicited retail broker-dealers to enter into placement agreements for each offering, and those retail broker-dealers sold the stock to retail investors nationwide.

It is against those retail broker-dealers that SNSFE is investigating.

According to the SEC's complaint filed in the U.S. District Court for the Northern District of Texas, Provident falsely promised yearly returns of up to 18 percent and misrepresented to investors that 85 percent of the funds raised through the offerings would be used to purchase interests in oil and gas real estate, leases, mineral rights, and interests, exploration and development. In fact, the SEC alleges that less than 50 percent of investor funds were used for their stated purpose, and the proceeds from later offerings were used to pay expenses related to earlier offerings and returns to investors in those offerings.

Those with information about Provident Royalties LLC and the broker-dealers who placed those securities in investor hands should feel free to contact attorneys at SNSFE.

Source: SEC Press Release 2009-151