Oh Auntjen, I am so sorry. Are you mad at your "trusted" adviser too or do you think he was scammed as well? It looks like the SEC has frozen all the accounts.

I'd be sick too. And I'd be seething with anger so I don't know what to tell you except to offer a good old fashioned HD ((((hug)))). If this is true, may they rot in you know where, AFTER their long prison term.

I don't know what gets into people like this. They think they deserve to live their lives by stealing from other people. I don't understand one bit. I wouldn't be able to sleep at night.

The news is so new I don't think your emotions are anything but normal. Vent away and thanks for naming this company.

Thanks, Golddust. If nothing else, I'll take all the sympathy and hugs (even of the virtual variety) that I can get right now. I am indeed angry at our advisor ... he's no fly-by-night schmuck; he's a well-known and highly reputable Dallas broker who has his own radio program and is sought after for his sound advice. I do believe that his firm was probably "suckered" into this, but right now I feel a need to point fingers, and I can't help but point in his direction. He/his firm are emailing clients since this news broke, with what basically amounts to "CYA" statements. You know, the kind of letter where they try to assuage the anger and fear, but adamantly stating that they had been assured by Provident Royalties that their company was 100% sound - trying to take the heat off of themselves, I think. (We call those types of letters "a$$hole armor".)

Oh, Auntjen, I am so sorry.

It is just so hard to imagine this happening. You know people are capable of doing it, but you think that there must be banking regulations to protect us and prevent it. And yet there aren't.

Chances are they will be cellblock mates of Madoff at some point down the road.

Auntjen - You have every right to be furious and sick about this. Your advisor did not perform the due diligence which he was obliged to do. There is no excuse for someone who advertises himself as being as being an expert, being "suckered" into such a scheme.

This sounds like the limited partnership schemes which were peddled in the 80s and 90s. My mother was taken by a so-called honest broker, who convinced her to sell $80,000 of decently performing Fidelity mutual funds, and to put the money into three real estate partnerships. At the time I knew less than nothing about investing, and my mom was a new and terribly grieving widow. After a few months, there began to be "performance problems". It took about four years for the whole thing to unravel, and we lost $70,000. My mom was literally sick about it.

So the state stepped in and prosecuted the four ringleaders. What did we get back? After all the lawyers took their fees, we, like the other investers, got nothing. That's what usually happens. Two of the men received probation and community service; our broker simply lost his license. They had preyed upon the elderly. Unlike my mother, some had sunk their live savings into the scheme.

There may be a class-action suit, as there was for us. As I said, the lawyers got it all.

Have you tried listening to Bob Brinker (ABC radio, weekend afternoons). He is my guru. He gives a college education in investment, which I learned by throwing myself into learning about investments after what happened to my mother. As far as I am concerned, if it's not from one of the big mutual fund houses - Fidelity, Vanguard, T.Rowe Price, it's not for us.

I know more than you can imagine how you feel. My sympathies are with you. You'll get past this.

As folks going through some "interesting" times too -- I can truly say that you have every single right to be seethingly MAD AS HELL! These so-called people are lower than pond scum!

I am sending along cyber-hugs and will hope that you will -- in time -- see some of your money back!

Jan at Rosemary Cottage

Banking regulations only work with BANKS. Otherwise, you are on your own, and there is no mercy out there!

AuntJen, you have my sympathy. I know that sick sick feeling of losing money due to greed and disregard for others. The way I came to deal with it is to convince myself that others more savvy than me got scammed by Madoff. I wanted to beat the crap out of anyone at that point but I didn't and I had to take an rx to keep me from being so upset that I couldn't function. I'm beyond it now unless I hear of someone else and then the blood boils and stomach roils all over again. If you think of how hard you worked to make it and then it's gone in a flash, it's darn hard to handle. I have no advice except to say you'll get beyond it but never have the same trust. I've lost in the market but I knew I was chancing it at times. That's a different story. My husband got through it without a tranquilizer and we never talk about it. Does no good. We try now to concentrate of what we have and try not to revisit that incident. I feel really sorry for you, you didn't deserve this. We all love you so that's something to dwell upon. :-)

Sable, there are other investment opportunities where your money is protected.

Aunt Jen - I'm so, so sorry this happened to you. I have no doubt you are to the point of being physically sick. Have you spoken with your financial advisor? How does he feel about all this? I'm not sure how I'd feel about his part, at the least, it does sound like he gave bad advice.

I hope you have some recourse in this and are able to get something back.

tina

I wonder if you will be able to join with others against your financial advisor since you specifically told him you wanted "something that would be more stable and secure"? I do know of someone who was able to recoup a substantial percentage of losses through this route. There was an out of court settlement because the investment firm couldn't risk prolonged negative publicity. It was a small firm and local to the DFW area so they had their back (deservedly) against the wall. The attorney they used worked on contingency. This all happened several years ago so I don't know if the same tactic would work today. The downside is that you will have to keep reopening the wound.

As a side note, I'm assuming you have removed your investments from this particular firm. There may be other problems lurking as this individual's definition of safe and secure didn't jive with your own.

I followed the advise of a broker for several months exactly once in my life and took a beating on WorldCom among other loser stocks - after that I've stuck with Fidelity Investments. All told it was alot of money to me. I try to do my own homework and live with lower, but safer, returns. I'll probably have to work till I fall over at a desk somewhere with my cold hand clutching a mouse - that or live in a van down by the river.

I know how painful losses can be - the sleepless nights and sick feeling washing over you - and I'm so sorry this has happened to you.

Linda J/texasporch

auntjen, so sorry this is happening to you, it's awful.

Just wanted to add my hugs . . . I'm just sick of these societal leeches who suck blood from honest people and then waltz around with their dishonest millions . . . I hope you can recover some of your $$.

Oh honey I am so sorry there is a special place in Hell for these crooks. Of course that doesn't do anything for you right now. Maybe try and focus on having a loving husband and family and your heath. I know that is lame but it is true.

....Jane

AuntJen, I am so, so sorry -- for you, for the other thousands of people who've been scammed of a lifetime of careful saving by these criminals. Cyberhugs to you and DH. The whole thing is just disgusting -- rampant, ugly greed.

Sable is right in only one small point...Banking regulations are for banks. Securities regulations are for securities and cover issues like this as administered through the SEC.

There are a couple of issues here Jen...first the obvious fraud is easy to spot, but you actually might have another case to consider in recouping your funds.

An oil and gas fund is not a low risk fund. 18% return is not evident of a low risk fund. Both are reasonable risks for a client who asked for a higher risk investment, but not for a client looking for safety.

Your meeting with your broker had to include some basic documentation including a risk profile of some sort which he may have in his paperwork (it may not have been shared with you at the time). These risk profiles are the key evidence to prove "suitability" in a claim made by a client against a broker/investment rep who claims that adequate risk conversations were not held and the investment was made by you completely unaware of the level of risk of this investment.

Often these types of schemes include higher returns to the broker, which is why they push them. Their pocketbook becomes more important than yours. Background work is not completed (called due dilligance) and risk profiles are ignored. If this is the case (it sounds to me as if it was Jen) than the person who sold you this investment could be found to be liable for some or all of your losses Jen.

I know you're out money, but Jen consider speaking first with the SEC (file a complaint using terminology that I've used here...do a little research if necessary on line to get what I'm saying if it's not clear). And also contact an attorney who specializes in securities fraud about your loss.

Don't delay on this...it could be the difference between a little return to you quite a bit more.

I was a licensed investment rep for several years Jen. I know what type of risks are involved in selling securities and was diligent in ensuring that my clients understood them as well. He might be a nice guy, but Jen from the outset of a 2 second explaination of this fund...it is not a low risk investment in any sense of the word. A client coming to me looking for security in a wild market...this would NEVER even be a consideration as an investment vehicle.

I agree 150% with igloochic. This was not a secure investment in the first place (nothing guaranteeing 18% ever is) and your broker did not perform due diligence. I also would severely restrict communications with the broker until you get a securities lawyer in place. Contact the Dallas office of the SEC and/or SIPC as well for guidance.

Another thing to consider...from today's NY Times...

Here is a link that might be useful: Custodian

At the bare minimum, I'd pull the rest of my money from this guy. He doesn't deserve your business. I'm sorry this happened.

I'm not financial savvy and don't have any words of wisdom. But I did want to send a big (((hug))). I am so sorry this happened.

I agree with igloochic, lido, and deee. Go after the "advisor" (check contract to see if he had a fiduciary responsibility to you, even if he didn't I think you may have something in "due diligence"). I'm so sorry.

First check who this brokerage is member with, it might be CFTC as well and then make a complaint for sure.
If nothing else, you will be able to write off this loss on your tax return and recoup some of the monies lost this way.
I am so sorry it happened to you, hugs.

Thank you all so very much for your commiseration. I appreciate your kind words, in spite of how terrible I am still feeling over this.

This morning I have emailed the SEC's local counsel, and asked if he could provide any guidance to us whatsoever. I told him that we just do not know where to go from here. I hope to hear back from him.

There is much to consider and much to look into, but I will keep you updated as this progresses. Quite frankly, I don't have the funds to hire an attorney, but I will still look into doing so, somehow, if need be.

Texasporch, I am curious about this DFW firm that you speak of. Would you be willing to divulge the name of the firm? You may certainly email me, if you would prefer. Since my firm is also local to this area, I'm very interested in learning who the firm is that you speak of.

Oh Auntjen, I am so sorry this has happened to you. I know how the physical sickness feels.

My story is different. My DD, 22 years old has an inheritance from her GGM being managed by mutual agreement between myself, DH, and my parents. She cannot receive the inheritance until she is 25. We agreed to invest about 25K of the inheritance in GM bonds, and you all know what has happended to GM. DD doesn't even know what has happened and I don't know how to tell her. This equals approximately 1/3 of her inheritance.

I really hope that you are able to recover some if not all of your loss. As hard as it is I am glad you are doing your part so that these people hopefully don't get away with it.

Big hugs to you and thank you for sharing your story so that others can learn.

Auntjen, I'm sorry to hear this bad news. I would think that there will be a class action law suit and you so you will be able to hopefully recoup some of your money.

This has been definitely an unsettling economic time, I stopped looking at my 401K statements several months ago. I had worked so hard for over 20 years investing the max you could put into the funds - and I had chosen funds that were so much more conservative than I was told to because I wanted to be safe. Oh well, so much for that - I've still lost over 30% of my money as I'm sure most everyone else has to in the market.

I know it's harder to accept since there was deceit involved in your case, but try to put it aside, take the remaining savings funds you have and put them in treasury bonds or something safer than a fund managed by a company. We still have two 401k's that are invested in general stock funds, but a very large chunk of our savings we've moved into government bonds and while we're only seeing a 3-4% return, the money is as safe as possible at this point.

I am so very sorry to hear of the losses of others as well. I know I'm certainly not alone in this boat, but it's definitely one case where misery does not love company. It sickens me that others are suffering, just as I am.

Quick update: I spoke at length with the local attorney for the SEC this morning, and he was incredibly helpful. I now feel so much more knowledgeable, and through that knowledge, empowered -- although at this point, there may be little that I can actually do. I'm currently in the process of taking my investments out of my current broker's hands. Does anyone have a recommendation for a brokerage firm that you like dealing with? I'm considering Schwab for starters, primarily because DH has an account there, and they have an office just right down the block from mine. (My Ponzi-directing broker is in Dallas - a right-royal pain to get to his office to speak to him in person.)

I am so very sorry, Jen. It is a horrible feeling...I know too well...what makes it worse, not only the loss of the money, but that it was basically a loss through theft.

I know how expensive attorneys can be..but if perhaps someone from your firm can recommened an SEC attorney for a consult (taking all documentation you have), sometimes a very well worded letter from an attorney to your broker will be of benefit. Even though your broker sent a CYA letter, perhaps it was sent to deter some clients not to pursue him...but from what you've posted, he absolutely did not make a suitable investment on your behalf. He should have known that 18% return was a red flag.

I am so hoping you will be one of the lucky ones who can recoup your investment.

Jen, I don't want to paint all brokers with one paintbrush, but why don't you go to a certified financial planner? They have certain laws, extra training and ethical standards to follow (see igloo's response above). Brokers may not be in your best interest. Gas/oil investments are FAR from safe/conservative. I feel this guy led you down the wrong path to make a commission for his own pocket. I'm so sorry this happened to you and your hubby. :(

Well, at this point, I don't need or want financial advice. I know where I want my funds to go, and am just primarily going to be concerned with the reputation of the firm and their fees to administer my accounts (which affects my bottom line, of course!).

There is currently a stay of litigation in this matter, which may or may not affect my ability to sue my broker (depending on how far-reaching the latitude of the receiver is going to be). The counsel for SEC that I spoke with on the phone stated that this is all very "new", and much is still coming to light. I'm in "watch and wait" mode as far as pursuing the broker on my own, but you can bet I'm sitting on my haunces ready to take action if need be.

I do not have personal experience with SEC but I do have with CFTC (this is equivalent to SEC just in futures markets). We had a complaint against our former broker, once they scre*ed us bad, we moved our account. We did not have an attorney, they had very expensive attorney. We ended up settling for about 30% of our loss through arbitration. So it can be done.
You have to have very good records and understanding of how the law is on your side. You work with lawyers, so that should give you some advantage right there.

Jen it's a separate issue (the fraud on behalf of the fund and the issue of the suitability). They can not be linked as one in any case. You should pursue both, and I did neglect a complaint to the SIPC as well is in order. Be sure you understand that your SEC and SIPC complaints are in now way in regards to the fraud of the fund, but instead are in regards to "Suitability" and the resulting loss you have taken due to a broker who did not follow correct suitability guidelines (they're pretty specific...in order to put you in a risky fund they should have made you sign a form that basically said "we don't recommend this fund due to the clients risk profile but they want it anyhoo").

You were taken twice my dear and I'm so sorry that's the case but this kind of stuff gets my goat!!! These responsabilities are so important and so many borkers and dealers just blow them off resulting in clients who can't sleep at night.