Provident Royalties and Fidelity Investments
Failed deals involving private placements in Provident Royalties are now dogging National Financial Services, a unit of Fidelity Investments. Trustees for Provident Royalties are asking a federal judge in Dallas to issue a subpoena to National Financial in order to gain access to retirement account documents of clients of four broker/dealers that sold investments in Provident and used National Financial as the clearing firm.
Specifically, the trustee, Milo Segner, wants documents of 579 clients who bought
$39 million of Provident from J.P. Turner & Co. LLC, Milkie/Ferguson Investments, National Securities Corp. and Securities America.
Dozens of broker/dealers sold Provident private placements from September 2006 to January 2009, raising about $485 million. In July 2009, the Securities and Exchange Commission (SEC) charged Provident with fraud. Among the allegations, the SEC referenced Provident’s operation as a Ponzi scheme.
As reported June 7 by Investment News, Segner also is suing a due-diligence analyst who assessed the series of Provident offerings. Segner is seeking to recover about $430,000 in fees that Provident paid to the analyst, Mick & Associates PC LLO.