Provident Royalties, based in Dallas, TX, has filed a petition for reorganization under Chapter 11. In 2009, the SEC obtained a temporary restraining order and an asset freeze alleging that from 2006 – 2009, Provident made a series of fraudulent offerings of preferred stock and limited partnership interests. The alleged fraud and Ponzi scheme sales were made to 7,500+ investors.
The four men who were responsible for the Ponzi scheme – Brendan Coughlin, Henry Harrison, Paul Melbye, and W. Mark Miller – were recently sentenced for their crimes, which resulted in over $485 million in losses to thousands of investors. Their fraud was built around oil and gas projects that promised investors over 18% in returns every year. Each man pled guilty, and are serving sentences ranging from six months to nearly two years. The men were forced to pay $2.3 million in restitution, a far cry from the nearly half a billion that these men stole from their clients.
Thankfully, the U.S. Bankruptcy Court in Texas established the Provident Royalties Liquidating Trust to allow investors to receive their lost financial assets back, but this may not solve the issue.
Investors Have Rights to Claims Against Provident Royalties
Because Provident Royalties was licensed by the Financial Industry Regulatory Authority (FINRA) while the fraudulent behavior was going on, Provident Royalties was legally obligated to monitor their brokers to ensure that they were acting ethically on behalf of their clients. Investors who suffered losses have the legal right to claims against Provident Royalties because the firm, per FINRA regulations, is legally responsible for the fraudulent actions of their brokers. FINRA laws form the basis for the rights of investors to recover compensation from brokerage firms.
Discuss Your Claim with Our Securities Fraud Lawyers
While FINRA regulations are intended to protect investors, they do not pursue claims for the sake of compensating victims of fraud. FINRA is essentially a police force for the financial industry, so their main concern is punishing the guilty, not restoring victims. That’s where Meyer Wilson can step in. We make sure that your voice is not lost in the middle of the criminal and disciplinary process, fighting every step of the way to ensure that you receive what is yours by right. FINRA regulations dictate that investment firms are legally obligated to pay back damages caused by fraudulent or negligent brokers. Let us fight for your rights against firms like Provident Royalties.
If you believe you have wrongly lost your investment due to the negligence or fraud of a broker, contact our firm to request a free case evaluation. We’ll help you fight back.