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WFP Securities has been ordered to pay almost $19 million to a trust representing investors who lost money in a Ponzi scheme sold by the defunct brokerage, according to the Wall Street Journal. The trustee of the liquidating trust accused WFP of negligence for not doing proper due diligence before selling preferred stock in oil and gas investments managed by Provident Royalties LLC, according to the Journal. The Securities and Exchange Commission had obtained an asset freeze against Provident in 2009 amid allegations that it ran a $495 million Ponzi scheme

My column of April 20, 2011, fingered WFP Securities for its role in taking advantage of investors. A number of investors had filed arbitrations against the brokerage. It closed down shortly thereafter. Another column of Oct. 31, 2012 dealt with the questionable activities of John Schooler, president of WFP Securities, and his brother Lou Schooler, whose related company had been charged by the Securities and Exchange Commission with defrauding investors in land partnerships.

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Comments

Visduh June 9, 2013 @ 5:53 p.m.

Is there any remote possibility that WFP has such a whopping sum of money that it can pay into the trust? I'd suspect that these grifters managed to hide all their assets or just spend them by now. Perhaps those assets that were frozen by SEC action can go toward the payment, but I'd be skeptical that there is that much "there" there.

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Don Bauder June 9, 2013 @ 7:37 p.m.

Visduh: The web of companies run by the Schooler brothers took a lot of people -- many elderly. I doubt if there is much left of WFP Securities other than possible insurance. Best, Don Bauder

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Twister June 10, 2013 @ 5:25 p.m.

That this kind of chicanery is increasingly prevalent should put it near the head of the list for some creative legislation. A culture of parasites cannot stand forever. Even a bacterium "knows" better than to drive the breeding population of its prey down below the level at which it cannot replace itself, not to mention the oscillations throughout the system.

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Don Bauder June 10, 2013 @ 5:41 p.m.

Twister: The Schooler brothers have fought regulators' attempts to rein in the allegedly predatory activities. Best, Don Bauder

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