Skip to main content


Representing Individual, High Net Worth & Institutional Investors

Office in Indiana


Home > Blog > FINRA Expels Provident Asset Management Over Fraudulent Private Placements

FINRA Expels Provident Asset Management Over Fraudulent Private Placements

Provident Asset Management has officially been expelled by the Financial Industry Regulatory Authority (FINRA) for marketing a series of fraudulent private placements through its affiliate, Provident Royalties, LLC, in what the regulator calls a “massive Ponzi scheme.”

According to FINRA, Provident misrepresented to investors that the funds raised through the various offerings would be used to purchase interests in the oil and gas business. In reality, the funds were commingled and used by an affiliated issuer to make dividend and principal payments to other investors. In addition, FINRA says Provident acted as the agent in an oil and gas private placement offering but failed to establish an escrow account for investors’ funds during the contingency period of the offering.

FINRA found that from September 2006 through January 2009, Provident Asset Management marketed and sold preferred stock and limited partnership interests in a series of 23 private placements offered by Provident Royalties, LLC. Provident Asset Management’s only business line was acting as the wholesaling broker-dealer for the Provident Royalties’ offerings, which were sold to customers through more than 50 retail broker/dealers nationwide. In total,  more than $480 million was raised through approximately 7,700 individual investments made by thousands of investors.

Meanwhile, FINRA’s broader investigation into broker/dealers that sold Provident private placements remains ongoing.

One thought on “FINRA Expels Provident Asset Management Over Fraudulent Private Placements”

  1. Stan Says:

    It si good to see regulators taking action against the financial predators. Unfortunately we seem to have a corporate culture in Canada that fosters fraud and wrongdoing.

    The Fiduciary Standards Conference at the OBA was quite refreshing to hear so many pronounce on the side of establishing fiduciary responsibility for all those who manufacture, distribute or sell fiancial products.

    It is not just the unregulated who defruad investors, and the losses from investment industry fraud and wrongdoing amounts to tens of billions of dollars every year.

    Legislation is needed that requires financial predatiors to disgorge profits and pay full restitution and damages.

    Until the perpetrators are held fully accountable, there will be little change.

« Back to Blog

Top of Page