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: FinancialCounsel

Eccleston Law Continuing Its Investigation Into The Provident Royalties Fraud And Brokerage Firms That Sold Those Securities

By James Eccleston

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The attorneys at Eccleston Law are continuing their investigation into Provident Royalties, LLC following the SEC allegation of 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 a number of broker-dealers who sold private placements to more 7,700 investors throughout the United States. While Provident's entities made some direct retail sales of securities, the bulk of the sales were made by retail broker-dealers who sold the stock to retail investors nationwide.

Provident falsely promised investors 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. Contrary to these representations, Provident allegedly used less than 50 percent of investor funds 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.

Eccleston Law has uncovered the following list of some of the broker-dealers making sales of Provident Royalties, the total sales they made, and the commissions they generated from these sales.

Firm name	Total sales	Total commission paid to BD
Advisory Group Equity Services Ltd.	$110,000	$70,650
AFA Financial Group LLC	$2,455,000	$456,150
American Portfolios Financial Services Inc.	$585,000	$66,650
Asset Management Strategies LLC	$220,000	$2,250
Ausdal Financial Partners Inc.	$100,000	$2,250
Barron Moore Inc.	$250,000	$96,750
Boogie Investment Group Inc.	$410,000	$110,150
Brookstone Securities Inc.	$460,000	$76,500
Callaway Financial Services Inc.	-	$22,500
Calton & Associates Inc.	$300,000	$40,750
Capital Financial Services Inc.	$33,655,000	$5,510,725
CapWest Securities Inc.	$21,745,000	$3,058,700
Chester Harris & Co.	$340,000	$297,500
Community Bankers Securities LLC	$2,780,000	$355,950
Crescent Securities Group	-	$9,375
David Harris & Co. Inc.	$850,000	$94,000
DeWaay Financial Network LLC	$850,000	$134,525
Eagle One Investments LLC	$360,000	$42,500
Empire Financial Group Inc.	$2,750,000	$234,200
Empire Securities Corp.	$205,000	-
E-Planning.com Securities Inc.	$3,765,000	$483,925
First Allied Securities Inc.	$380,000	$11,250
Gk Securities LLC	$50,000	-
Grant Bettingen Inc.	$215,000	$19,350
GunnAllen Financial Inc.	$22,255,000	-
Harrison Douglas Inc.	$1,830,000	$569,900
Independent Financial Group	$495,000	-
INVEST Financial Corp.	$100,000	-
Investlinc Securities LLC	$2,095,000	$183,275
Investors Capital Corp.	$3,400,000	$427,975
J.P. Turner & Co. LLC	$11,600,000	-
Jesup & Lamont Securities Corp.	$100,000	$13,500
Kaiser & Co.	$100,000	$160,650
Lighthouse Capital Corp.	$250,000	$33,750
Main Street Securities LLC	$205,000	$45,450
Matheson Securities LLC	$100,000	$37,800
Milkie Ferguson Investments Inc.	$4,145,000	$480,350
Morrow Wealth Management	$30,000	-
National Securities Corp.	$3,665,000	$437,250
Newbridge Securities Corp.	$25,000	$15,750
NEXT Financial Group Inc.	$33,485,000	$3,190,200
Okoboji Financial Services Inc,	$21,910,000	$2,261,225
Private Asset Group Inc.	$2,015,000	$204,150
Provident Asset Management	$50,000	-
QA3 Financial Corp.	$32,585,000	$6,974,450
Questar Capital Corp.	$250,000	$24,125
Securian Financial Services Inc.	$50,000	-
Securities America Inc.	$17,995,000	$3,723,475
Securities Network LLC	$215,000	$89,550
SII Investments Inc.	$100,000	-
Sterling Enterprises Group Inc.	$100,000	$13,000
Summit Brokerage Services Inc.	$560,000	$81,000
Unaffiliated Broker-Dealer	$150,000	-
United Equity Securities LLC	$660,000	$173,200
United Securities Alliance Inc.	$550,000	$401,850
Waterford Investor Services Inc.	-	$2,250
Wedbush Morgan Securities Inc.	$325,000	-
WestPark Capital Inc.	$785,000	$114,250
WFP Securities Corp.	$6,755,000	$1,286,775
Williams Financial Group Inc.	$175,000	-
Workman Securities Corp.	$9,045,000	$1,239,025
	$250,990,000	$33,380,775

If you have lost money investing in Provident Royalties, you may be able to recover your losses through arbitration. Contact Jim Eccleston at the Eccleston Law Offices at 312-332-0000 to discuss your case.

Full post as published by FinancialCounsel on January 04, 2011 (boomark / email).