SEC Accuses Provident Royalties in $485 Million Ponzi Scheme......

Discussion in 'Wall St. News' started by S2007S, Jul 7, 2009.

  1. S2007S


    Im surprised this market even exists with all this dirty GREED that takes place, how many more PONZI SCHEMES are going to be uncovered. Its become a joke how people fall for these schemes, 7700 Investors all taken for in this latest scheme. This market and rest of this economy has become a Fuckin joke.....

    SEC Accuses Provident Royalties in $485 Million Ponzi Scheme

    By Joshua Gallu

    July 7 (Bloomberg) -- The U.S. Securities and Exchange Commission sued Dallas-based Provident Royalties LLC and its three principals, accusing them of raising $485 million in an alleged Ponzi scheme involving oil-and-gas securities.

    Paul Melbye, Brendan Coughlin, Henry Harrison and the firm they controlled lured more than 7,700 investors by promising yearly returns of up to 18 percent, the SEC said in a lawsuit filed at federal court in Dallas. A judge agreed to freeze assets and appointed a receiver, the SEC said today.

    From at least September 2006 through January, Provident used less than half of the funds for the stated purpose of purchasing interests in oil and gas real estate, leases and mineral rights, the SEC said in its complaint. Early investors, who were told 86 percent of funds would be invested, were paid returns with funds from later participants, the agency said.

    “Provident sold ostensibly safe securities such as preferred stock to thousands of investors,” Ken Israel, director of the SEC’s regional office in Salt Lake City, said in a statement. “It was actually operating a Ponzi-like shell game in which assets were shuttled from one entity to another and investors were paid ‘returns’ from whatever money was available -- usually that of the most recent investors.”

    The regulator said it wants the defendants to forfeit “ill-gotten gains” and pay unspecified fines.

    Lee Polson, an Austin, Texas-based attorney for Coughlin and Harrison, declined to comment. A lawyer for Melbye could not be immediately identified. Phone messages left at the Provident Royalties office in Dallas were not immediately returned.
  2. spinn


  3. Those three will be ...VERY... popular in prison.