Wedbush Morgan Securities, Inc. stockbroker Bambi Holzer, who operates out of Beverly Hills, California, is one of the many financial advisors who sold fraudulent Provident and Shale Royalties investments to investors. In her 27-year career, Ms. Holzer has appeared on the Today show and NBC Nightly News and has written four books, titled Retire Rich, Set for Life, Getting Yours, and Financial Bliss. Ms. Holzer’s high profile and location in the greater Los Angeles area allowed her to build a book of business that includes or included Hollywood stars.

Ms. Holzer’s Beverly Hills office near Rodeo Drive displays a picture of herself with Pope John Paul II. Not on display, however, is her regulatory rap sheet. This publicly available document details approximately 50 customer complaints that have been filed against her, in which customers have complained that she breached fiduciary duties, churned accounts, misrepresented investments, and sold unsuitable securities.

To date, Ms. Holzer’s various employers have paid approximately $12 million to settle various investor complaints. Her record also reveals that she was personally fined $100,000 by securities regulators for misrepresenting the nature of investments that she sold to her customers. As part of that disciplinary proceeding, Ms. Holzer also was suspended for 21 days and was ordered to attend continuing education courses so that she better understood the investment products that she sold. During her career, Ms. Holzer was fired from one firm and was “permitted to resign” from another. (In an effort to protect a broker’s disciplinary record, brokerage firms have been known to permit a broker to resign rather than be fired when the broker has violated some company policy or regulatory rule, for example, mishandled customer accounts.)

Despite her checkered past, Ms. Holzer has been able to maintain a long career as a trusted financial advisor, likely because most investors are unaware of her disciplinary record. Further, notwithstanding her far-less-than-pristine track record, brokerage firms have continued to employ her. Unfortunately for investors, this has allowed Ms. Holzer and her employing brokerage firms to continue to cause grave financial harm, including through the sale of fraudulent Provident and Shale Royalties securities and other high-commission private placements.

Investors in Provident and Shale Royalties appear to have lost all of their money. Provident Royalties, LLC and affiliated entities issued securities under the names of Provident and Shale Royalties. These entities have filed for bankruptcy protection and now lie in a U. S. Securities & Exchange Commission receivership. After a review of Provident’s books and records, the SEC Receiver has determined that the entities were a massive Ponzi scheme. These securities never should have been sold to any investor. Unfortunately, for Provident and Shale Royalties investors, brokerage firms such as Wedbush Morgan, Securities America, and NEXT Financial Group either failed to perform adequate due diligence before approving these products for sale to customers or they ignored the earmarks of a Ponzi scheme.

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