A US registered representative and his individual practice have been sued in a potential class action stemming from oil-and-gas private placements that the Securities and Exchange Commission claims were fraudulent, according to Investment News.

The lawsuit, filed last week in a federal court in Idaho, alleges that Bradley Hofhines and his firm, Summit Retirement Advisors, failed to tell clients that returns from investments in Provident Royalties securities did not come from revenue generated by actual investments in oil-and-gas properties.

Instead, the report said, investor funds were commingled, and funds raised from later offerings were used to pay so called dividends or “returns of capital” to earlier Provident investors.

The story is yet another example of the amount of litigation that has come to light in the recent financial turmoil. As reported elsewhere by WealthBriefing, sister website of Family Wealth Report, a Japanese investor in Hong Kong has sued Merrill Lynch in recent days over the sale of warrants. And overshadowing the entire financial services industry has been the $65 billion Ponzi fraud of Bernard Madoff, now in jail after pleading guilty to swindling investors, including wealth management firms.

Mr. Hofhines, whose practice is based in Meridian, Idaho, is affiliated with Securities America, an independent-broker-dealer subsidiary of Ameriprise Financial. Both those companies are named in the suit, which is seeking class action status, the report said.