Securities America and financial adviser Bradley Hofhines have been sued in a potential class action tied to Provident Royalties and oil-and-gas private placements that the Securities and Exchange Commission (SEC) alleged in July were fraudulent. Securities America has been named in at least two other related potential class actions; however, this may be the first time an adviser and his individual practice are cited.
As reported Dec. 1 by Investment News, a lawsuit filed Nov. 25 in an Idaho federal court alleges that Bradley K. Hofhines and his firm, Summit Retirement Advisors LLC, failed to disclose to clients that returns from investments in Provident Royalties LLC securities did not come from revenue generated by actual investments in oil-and-gas properties.
“Rather, investor funds were commingled, and funds raised from later offerings were used to pay so called dividends or “returns of capital” to earlier Provident investors,” the article says.
Hofhines is affiliated with Securities America, an independent broker/dealer subsidiary of Ameriprise Financial. Securities America and Ameriprise are named in the latest lawsuit.
The complaint alleges that the defendants violated federal securities laws and the Idaho Uniform Securities Act, as well as provided investors with materially untrue and misleading offering materials regarding Provident Securities.
In July, the SEC charged Dallas-based Provident of allegedly committing fraud in connection to the sale of $485 million of preferred stock and limited partnership offerings in oil and gas deals. Since then, many investors have begun legal action to get their money back by filing individual arbitration claims with the Financial Industry Regulatory Authority (FINRA).
If you have suffered investment losses and wish to discuss filing an individual arbitration claim with FINRA or have questions about these investments, please contact us.