Provident Royalties LLC, a Texas company that offered unregistered investments in oil and gas opportunities called "Shale Royalties" was sued by the Securities and Exchange Commission for perpetrating a fraudulent "Ponzi" scheme.

Investigation by the investment litigation law firm of Chapman & Associates indicates that Provident Royalties raised over $485 million from more than 7,700 investors nationwide. The perpetrators of the scheme told investors their funds were going to purchase interests in oil and gas real estate and finance new exploration and development projects. In reality, the Shale Royalties perpetrators used the funds to make "dividend payments" to earlier investors and to finance their own lavish life styles.

The law firm of Chapman & Associates established that the organizers of the "Shale Royalties" scheme employed several broker-dealers to help them sell the "investment opportunities" to their customers. "These broker-dealers helped perpetrate the Shale Royalties scheme, in breach of their duties to the investing public, and received hefty commissions in return," said John Chapman, a securities litigation attorney. Chapman & Associates is preparing to take action on behalf of investors victimized by the "Shale Royalties" scheme.

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