On May 30, 2013, a FINRA arbitration panel issued an $18.5 million award against WFP Securities Corp. in connection with its sales of Provident Royalties, LLC (“Provident Royalties”). WFP Securities which went out business in 2011.
Specifically, Provident Royalties issued $485 million in private placements that were sold by dozens of independent broker-dealers. In 2009, Provident Royalties was charged with fraud by the SEC, which alleged that the company made fraudulent oil and gas offerings between 2006 and 2009 to more than 7,700 investors. Almost three dozen broker-dealers that sold preferred shares of Provident Royalties have gone out of business and are unable to pay the costs of investor complaints.