Investment Lawyer

Pacific Coast Oil Trust (ROYT) Investor Loss Recovery

March 9, 2016 | by Staff Attorney

The investment attorneys with Gana Weinstein LLP are investigating and representing investors who were inappropriately recommended oil and gas and commodities related investments. Investors may have potential legal remedies due to unsuitable recommendations by their broker to invest in this speculative and volatile area. One royalty trust that has suffered substantial declines is Pacific Coast Oil Trust (Stock Symbol: ROYT). Since the trust’s inception in May 2012 it has suffered a 95% loss in value.

Pacific Coast Oil Trust is a Delaware statutory trust formed by Pacific Coast Energy Company LP (PCEC) containing interests in California onshore oil properties located in the Santa Maria and Los Angeles Basins. PCEC owns the underlying properties which consist of proved developed reserves and other development potential on the underlying properties most of which is oil and natural gas related production.

Oil and gas royalty trusts, like master limited partnerships (MLPs), invest in the energy and commodities sector. However, unlike MLPs, royalty trusts generate income from the actual production of natural resources such as coal, oil, and natural gas and therefore the cash flows from royalty trusts are subject to swings in commodity prices and production levels causing them to be very inconsistent. Royalty trusts have no physical operations, no management, and no employees. Instead, royalty trusts are merely financing vehicles run by banks that trade like stocks. Another company actually mine the resources and pay the royalties to the trust.

Whiting USA Trust II (WHZ) Investor Loss Recovery

March 9, 2016 | by Staff Attorney

The investment attorneys with Gana Weinstein LLP are investigating and representing investors who were inappropriately recommended oil and gas and commodities related investments. Investors may have potential legal remedies due to unsuitable recommendations by their broker to invest in this speculative and volatile area. One royalty trust that has suffered substantial declines is Whiting USA Trust II (Stock Symbol: WHZ). Over the past year the trust has suffered a 95% loss.

Whiting Oil Trust II was created in December of 2011 at the height of the oil market and has since suffered staggering losses as oil has tumbled. Recently, the price of the trust to drop below $1 per unit and was delisted.

Oil and gas royalty trusts, like master limited partnerships (MLPs), invest in the energy and commodities sector. However, unlike MLPs, royalty trusts generate income from the actual production of natural resources such as coal, oil, and natural gas and therefore the cash flows from royalty trusts are subject to swings in commodity prices and production levels causing them to be very inconsistent. Royalty trusts have no physical operations, no management, and no employees. Instead, royalty trusts are merely financing vehicles run by banks that trade like stocks. Another company actually mine the resources and pay the royalties to the trust.

Mesabi Trust (MSB) Investor Loss Recovery

March 7, 2016 | by Staff Attorney

The investment attorneys with Gana Weinstein LLP are investigating and representing investors who were inappropriately recommended oil and gas and commodities related investments. Investors may have potential legal remedies due to unsuitable recommendations by their broker to invest in this speculative and volatile area. One royalty trust that has suffered substantial declines is Mesabi Trust (Stock Symbol: MSB). Over the past year the trust has suffered a 76% loss.

According to the company’s website, Mesabi Trust is a royalty trust organized in 1961 and derives income from an iron mine from the Peter Mitchell Mine located near Babbitt, Minnesota, at the eastern end of the Mesabi Iron Range. The mine is operated by Northshore Mining Company, a subsidiary of Cleveland-Cliffs Inc.

Oil and gas royalty trusts, like master limited partnerships (MLPs), invest in the energy and commodities sector. However, unlike MLPs, royalty trusts generate income from the actual production of natural resources such as coal, oil, and natural gas and therefore the cash flows from royalty trusts are subject to swings in commodity prices and production levels causing them to be very inconsistent. Royalty trusts have no physical operations, no management, and no employees. Instead, royalty trusts are merely financing vehicles run by banks that trade like stocks. Another company actually mine the resources and pay the royalties to the trust.

Broker Investigation: Customer Complaints Against Advisor Paul Blum

March 7, 2016 | by Staff Attorney

The securities fraud lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority’s (FINRA) against broker Paul Blum (Blum). According to BrokerCheck records Blum has been the subject of at least eight customer complaints three of which have been filed since 2015. The customer complaints against Blum allege a number of securities law violations including that the broker made unsuitable investments, and excessive trading among other claims.

The most recent customer complaint filed in December 2015 and alleged negligence in recommending the purchase of bonds that defaulted from February 2009 until April 2014 claiming $450,000 in damages. The claim is still pending. In November 2015, another client filed a complaint alleging Blum invested in high yield bonds without consultation between May 2013 and May 2014 resulting in $133,000 in damages. The dispute is currently pending. In a third complaint filed in November 2015, an investor claimed that Blum invested in appropriate bonds from 2005 through 2015 causing $140,000 in damages. The claim was settled.

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.

Sunoco Logistics Partners L.P. (SXL) Investor Recovery Options

February 29, 2016 | by Staff Attorney

The investment attorneys with Gana Weinstein LLP continue to report on investor related losses in oil and gas and commodities related investments. Investors may have potential legal remedies due to unsuitable recommendations by their broker to invest in this speculative and volatile area. Our firm represents securities investors in claims against brokerage firms over sales practices related to the recommendations of oil & gas and commodities products such as exchange traded notes (ETNs), structured notes, private placements, master limited partnerships (MLPs), leveraged ETFs, mutual funds, and individual stocks.

Among the MLPs that have suffered significant declines is Sunoco Logistics Partners (NYSE:SXL). Sunoco Logistics Partners has plummeted in value by about 58% in value over the last year. According to the company’s website, Sunoco Logistics Partners owns and operates a logistics business with a diverse portfolio of crude oil, refined products, and natural gas liquids pipeline, terminalling and acquisition and marketing assets. Sunoco Logistics Partners’ general partner is a consolidated subsidiary of Energy Transfer Partners, L.P. (NYSE: ETP).

As a background, The MLP sector had totaled $600 billion in assets at its peak before collapsing to about $300 billion now. According to the Associated Press, investors have lost an astonishing $8 of every $10 they had invested since 2014. The research does not include losses from $37 billion of bonds sold by the partnerships in the five years since 2010 or losses from private placement partnerships. However, banks like Citigroup, Barclays, and Wells Fargo made an estimated $1.1 billion in fees for selling these products to investors.

ONEOK Partners, L.P. (OKS) Investor Recovery Options

February 27, 2016 | by Staff Attorney

The investment attorneys with Gana Weinstein LLP continue to report on investor related losses in oil and gas and commodities related investments. Investors may have potential legal remedies due to unsuitable recommendations by their broker to invest in this speculative and volatile area. Our firm represents securities investors in claims against brokerage firms over sales practices related to the recommendations of oil & gas and commodities products such as exchange traded notes (ETNs), structured notes, private placements, master limited partnerships (MLPs), leveraged ETFs, mutual funds, and individual stocks.

Among the MLPs that have suffered significant declines is ONEOK Partners, L.P. (NYSE:OKS). ONEOK Partners has plummeted in value by about 57% in value over the last two years. According to the company’s website, ONEOK Partners, is one of the largest publicly traded master limited partnerships that owns natural gas liquids systems that connects NGL supply in the Mid-Continent, Permian and Rocky Mountain regions with key market centers. The company claims to be a leader in the gathering, processing, storage and transportation of natural gas in the U.S.

As a background, about 86% of the total MLP securities market, a $490 billion sector, can be attributed to energy and natural resource companies. In the past year, investors have lost $20 billion in publicly traded in master limited partnerships, publicly traded oil funds. This amounts to an astonishing $8 of every $10 they had invested, according to a report prepared for The Associated Press article. The research does not include losses from $37 billion of bonds sold by the partnerships in the five years since 2010 or losses from private placement partnerships. However, banks like Citigroup, Barclays, and Wells Fargo made an estimated $1.1 billion in fees for selling these products to investors.

FINRA Sanctions Finance 500 Over Penny Stock Sales Practices

February 27, 2016 | by Staff Attorney

The investment attorneys of Gana Weinstein LLP are investigating regulatory complaints filed by The Financial Industry Regulatory Authority’s (FINRA) against brokerage firm Finance 500, Inc. (Finance 500) and its employees including William Watson, Robert Hicks, Geoffrey Schiffrin, Paul Savage (Disciplinary Proceedings Nos. 2013038091902, 2013036837802). The complaints largely focus on allegations that the firm failed to supervise the issuance, sales, and trading of various low-priced securities or penny stocks.

According to one of the complaints, FINRA alleged that Finance 500 raised millions for four different penny stock issuers. FINRA alleged that from June 2012 to June 2014 Finance 500 failed to enforce a reasonable supervisory system to review and monitor sales of private placements by its investment banking department in the areas of due diligence, suitability, and marketing materials provided to customers. In addition, FINRA alleged that from March 2013 through June 2014, the firm used or permitted issuers to use, private placement marketing materials that were not fair and balanced and made misleading unsupported statements.

While FINRA’s investigation focused on many areas of securities issuance, one area focused on was the firm’s suitability procedures for private placements which were found to be not reasonable. FINRA stated that Finance 500 did not have an adequate procedures regarding how it would collect the suitability documents from each customer and in some cases the documents that it did collect were incomplete and did not include all requested information. In addition, FINRA found that the firm lacked procedures regarding how and when supervisory approval would be given for a particular customer and at times allowed its supervisory system to be evaded by permitting customers solicited by the firm’s registered representatives to make investments directly with the issuer.

Targa Resources Partners (NGLS) Loss Recovery Options

February 25, 2016 | by Staff Attorney

Our firm is investigating potential securities claims against brokerage firms over sales practices related to the recommendations of oil & gas and commodities products such as exchange traded notes (ETNs), structured notes, private placements, master limited partnerships, leveraged ETFs, mutual funds, and individual stocks. Investors may have potential legal remedies due to unsuitable recommendations by their broker to invest in this speculative and volatile area. Targa Resources Partners (Ticker Symbol: NGLS) is a Master Limited Partnership (MLP). About 86% of the total MLP securities market, a $490 billion sector, can be attributed to energy and natural resource companies. Targa Resources Partners has declined about 81% in value over the last two years and is trading at less than $10 a share. According to its website, Targa Resources Partners is a growth-oriented provider of midstream services and one of the largest independent midstream energy companies operating in North America. The company owns, operates, acquires, and develops a diversified portfolio of midstream energy assets.

Our firm continues to file complaints on behalf of investors who have been overconcentrated in MLPs like Targa Resources Partners. Our clients tell us similar stories that their advisors hyped MLPs as high yielding investments without significant discussion of risk. In a recent Associated Press article, common stories of how investors are pitched by their financial advisors on oil and gas private placements were reported on. Often times these products are pitched as ways to ride the boom in U.S. oil and gas production and receive steady streams of income.

In the past year, investors have lost $20 billion in publicly traded in master limited partnerships, publicly traded oil funds. This amounts to an astonishing $8 of every $10 they had invested, according to a report prepared for The Associated Press article. The research does not include losses from $37 billion of bonds sold by the partnerships in the five years since 2010 or losses from private placement partnerships. However, banks like Citigroup, Barclays, and Wells Fargo made an estimated $1.1 billion in fees for selling these products to investors.

Linn Energy (LINE) and LinnCo (LNCO) on the Verge of Bankruptcy

February 18, 2016 | by Staff Attorney

The investment attorneys with Gana Weinstein LLP continue to report on investor related losses in oil and gas and commodities related investments. Investors may have potential legal remedies due to unsuitable recommendations by their broker to invest in this speculative and volatile area.

Among the MLPs that have suffered significant declines and now is in jeopardy of bankruptcy is Linn Energy (LINE) and LinnCo (LNCO). Both stocks have plummeted in value by about 98% in value over the last year. According to the company’s website, LinnCo is a limited liability company created to enhance LINN Energy LLC ability to raise additional equity capital to execute a growth strategy. While LinnCo’s initial purpose was to own units in its affiliate in connection with the acquisition of Berry Petroleum Company, LinnCo allowed the acquisition and subsequent transfer of assets to Linn Energy. Linn Energy is a top-20 U.S. independent oil and natural gas company and owns approximately 7.3 Tcfe(2) of proved reserves in the Rockies, California, Hugoton Basin, Mid- Continent, Permian Basin, east Texas and north Louisiana, Michigan, Illinois and South Texas.

Now according to analysts, Linn Energy and LinnCo announced a plan to “explore strategic alternatives related to its capital structure.” Simply put, it appears that Linn Energy is out of money and has drawn down the last of its credit facility with only $919 million left out of $3.6 billion line for general corporate purposes.

Mutual Fund Duff & Phelps Select Energy MLP (DSE) Investor Recovery Options

February 18, 2016 | by Staff Attorney

The investment attorneys with Gana Weinstein LLP continue to report on investor related losses in oil and gas and commodities related investments. Investors may have potential legal remedies due to unsuitable recommendations by their broker to invest in this speculative and volatile area. Our firm has been tracking a number of leveraged Master Limited Partnership (MLP) closed-end funds that have suffered significant losses. Among those funds is Duff & Phelps Select Energy MLP Fund (NYSE:DSE). The Duff & Phelps fund opened in June 2014 and has plummeted in value by 75% since then losing hundreds of millions in investor funds.

As a background, about 86% of the total MLP securities market, a $490 billion sector, can be attributed to energy and natural resource companies. In the past year, investors have lost $20 billion in publicly traded in master limited partnerships, publicly traded oil funds. This amounts to an astonishing $8 of every $10 they had invested, according to a report prepared for The Associated Press article. The research does not include losses from $37 billion of bonds sold by the partnerships in the five years since 2010 or losses from private placement partnerships. However, banks like Citigroup, Barclays, and Wells Fargo made an estimated $1.1 billion in fees for selling these products to investors.

Our clients tell us similar stories that their advisors hyped MLPs as high yielding investments without significant discussion of risk. In a recent Associated Press article, common stories of how investors are pitched by their financial advisors on oil and gas private placements were reported on. Often times these products are pitched as ways to ride the boom in U.S. oil and gas production and receive steady streams of income.