Why has the Securities and Exchange Commission filed a lawsuit against Provident Royalties LLC?
WASHINGTON (Dow Jones)–The Securities and Exchange Commission said Tuesday it has obtained an emergency asset freeze against a Dallas company in bankruptcy and three of its operators amid civil allegations the company ran a $485 million Ponzi scheme. In a lawsuit filed in a Texas federal court, the SEC said that Provident Royalties LLC made fraudulent securities offerings involving oil and gas assets between June 2006 and January 2009 to more than 7,700 investors. The suit names Provident Royalties, as well as its three founding members: Paul Melbye, 44; Brendan Coughlin, 43; and Henry Harrison, 44. The suit also names Provident’s brokerage arm, Provident Asset Management LLC, and 21 of the company’s entities that offered and sold securities. Thomas Melton, a senior regional trial counsel for the SEC, said the asset freeze was obtained last week, but the case was officially unsealed Tuesday. The SEC’s complaint alleges that Provident falsely promised yearly returns of up to 18% and mi
