Provident Royalties investors who received a ballot for accepting or rejecting the Fourth Amended Consolidated Plan of Liquidation are advised that the ballot must be received by EPIQ Bankruptcy Solutions by May 28, 2010. Eligible voters should be aware that they have the right to pursue their own claims, rather than assign them to the PR Liquidating Trust. An investor who submits their ballot but fails to exercise the opt-out election will automatically assign to the PR Liquidating Trust their individual claims they may have against their brokerage firm or financial advisor who placed them in the Provident investment, and will be barred from bringing an individual action.
KlaymanToskes strongly encourages eligible voters who purchased Provident Royalties from a full-service brokerage firm and FINRA member, and sustained damages of $200,000 or more, to consider filing an individual arbitration claim instead of assigning their rights away. By assigning your causes of action and claims to the PR Liquidating Trust, any future lawsuit brought by the Trust to recover Provident losses will most likely be filed as a class action or mass action. However, by participating in a class action or mass action lawsuit, an investor may only recover a nominal amount. If one has experienced significant losses in Provident Royalties, and purchased the investment from a full-service brokerage firm, it may be more beneficial for them to file an individual securities arbitration claim. In 2003, KlaymanToskes conducted a detailed study of securities arbitration versus class action. The study concluded that investors who file a securities arbitration claim traditionally obtain an overall higher rate of recovery as opposed to participating in a class action lawsuit. To view the full results of the comparison, please visit the following link: https://klaymantoskes.com/documents/classvr.pdf
Under NASD Rules, brokerage firms have an obligation to conduct a reasonable investigation of the issuer and the securities they recommend in offerings made under the SEC’s Regulation D under the Securities Act of 1933, also known as private placements. Provident Royalties securities were private placements. Regulation D provides exemptions from the registration requirements of Section 5 under the Act. Regulation D transactions, however, are not exempt from the antifraud provisions of the federal securities laws. A brokerage firm has a duty—enforceable under federal securities laws and FINRA rules—to conduct a reasonable investigation of securities that it recommends, including those sold in a Regulation D offering. Failure to comply with this duty gives rise to an individual cause of action against the brokerage firm who sold the product to the customer.
Provident Royalties investors who received a ballot for accepting or rejecting the Fourth Amended Consolidated Plan of Liquidation can contact KlaymanToskes to explore their legal rights and options.