“From 2006 to 2009, Provident Asset Management raised $485 million from 7,700 investors who were drawn to its promises of annual returns as high as 18 percent on oil and gas assets. Law firm Mick & Associates helped. Provident paid Mick to provide “due diligence” reports to help brokers decide whether to recommend the investments to their clients.
“Brad Updike, a Mick energy-sector specialist, reviewed each of the 23 deals, known as private placements. In one of his reports, Updike wrote that while on a visit to the Dallas, Texas, company, Provident’s founder “showed me several strategic-planning maps” where efforts were under way to drill and complete wells.
“In a subsequent 2008 report, Updike said he wanted more information: “We would like to see audited financial statements or alternatively a report from an independent accounting firm that validates the information reported by Provident.” Even so, Updike concluded that, based on the information Provident provided, the deal could allow investors “diversification within their natural resource portfolios.”
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