Securities Attorney

Investor Recovery Options for Alliance Resource Partners (ARLP) Losses

January 19, 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. Alliance Resource Partners (Ticker Symbol: ARLP) 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. Alliance Resource Partners has declined 67.9% in value from its 52-week high and is trading at only $14.01 a share. Alliance Resource Partners business focuses in the coal sector.

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.

Investor Recovery Options for Crestwood Equity Partners (CEQP) Losses

January 13, 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. Crestwood Equity Partners (Ticker Symbol: CEOP) is a Master Limited Partnership (MLP). Crestwood Equity Partners has declined 75.6% in value from its 52-week high and is trading at only $20.62 a share. Crestwood Equity Partners business focuses in the natural gas midstream sector.

About 86% of the total MLP securities market, a $490 billion sector, can be attributed to energy and natural resource companies. According to Bloomberg, many oil companies are in trouble and are going bankrupt as U.S. high-yield debt issued to junk-rated energy companies grew four-fold to $208 billion. The bankruptcies have been devastating causing forced selling at fire sale prices. For example, Dune Energy had reserves valued at more than $1 billion but sold those oil fields for only $19 million. The situation is only getting worse with lenders running out of options to put off debts. Most of these companies are now struggling to stay afloat with oil prices at $45.

Oil and gas and commodities related investments have been recommended by brokers under the assumption that commodities prices would continue to go up. Some experts are saying that if production volume continues to be as high as it currently is and demand growth weak that the return to $100 a barrel is years away.

Investor Recovery Options for Southcross Energy LP (SXE) Losses

January 9, 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. Southcross Energy LP (Ticker Symbol: SXE) is a Master Limited Partnership (MLP). Southcross Energy has declined 76.2% in value from its 52-week high and is trading at only $3.93 a share. Southcross Energy business focuses in the natural gas midstream sector.

About 86% of the total MLP securities market, a $490 billion sector, can be attributed to energy and natural resource companies. According to Bloomberg, many oil companies are in trouble as U.S. high-yield debt issued to junk-rated energy companies grew four-fold to $208 billion. Most of these companies are now struggling to stay afloat with oil prices at $45. Many of these companies relied upon high energy prices in order to sustain their operations. As reported by the Wall Street Journal the drop in oil and energy prices and the industry downturn has made it difficult for many companies to refinance their debts.

However, brokers that have recommended MLPs to investors may have made unsuitable recommendations based upon the yields of these investments rather than the risk to principal. Over the past year MLPs have been hammered due to weaknesses in oil and gas and commodities markets.

Investor Recovery Options for Mid-Con Energy Partners (MCEP) Losses

January 8, 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. Mid-Con Energy Partners (Ticker Symbol: MCEP) is a Master Limited Partnership (MLP). Mid-Con Energy Partners has declined 80.6% in value from its 52-week high and is trading at only $1.4 a share. Mid-Con Energy Partners business focuses in the oil and gas production sector.

About 86% of the total MLP securities market, a $490 billion sector, can be attributed to energy and natural resource companies. Oil and gas and commodities related investments have been recommended by brokers under the assumption that commodities prices would continue to go up. However, due to a combination of forces including slack demand in China and the strengthening dollar, last summer the price of oil & gas plummeted and remains around $40 to this day. Some experts are saying that if production volume continues to be as high as it currently is and demand growth weak that the return to $100 a barrel is years away.

However, brokers that have recommended MLPs to investors may have made unsuitable recommendations based upon the yields of these investments rather than the risk to principal. Over the past year MLPs have been hammered due to weaknesses in oil and gas and commodities markets.

Claren Road Asset Management LLC Fund Investor Recovery Options

January 2, 2016 | by Staff Attorney

The investment attorneys of Gana Weinstein LLP are investigating potential recovery options for investors in the Claren Road Asset Management LLC fund (Claren Road), managed by Carlyle Group LP (Carlyle Group). According to sources, the global long / short hedge fund, has faced a flood of investors heading for the exit doors causing the firm to issue IOUs and promises of partial redemptions. In total the fund that once had assets under management of $8.5 billion has lost the confidence of the vast majority of its clients having lost all but $1.25 of the former amount. The fund is run in part out of London by Martin Bercetche.

According to news sources, the hedge fund invested in corporate debt and credit derivatives had an unusual short bias by betting that bond prices would fall and interest rates would rise. The fund’s large exposure to bankruptcy troubled entities Fannie Mae and Freddie Mac has hurt the portfolio. The funds losses may be caused by having the right idea at the wrong time. Interest rate rises in the U.S. might have not occurred in 2015 as the investments needed.

The fund’s withdrawal woes began to be reported in July 2015 by the Wall Street Journal reporting that the consultant, Cliffwater LLC recommended that its clients with about $800 million invested in Claren Road comprising at that time 14% of Claren Road’s total assets under management bale on the fund. From the article, the reason for the recommendation wasn’t clear although it was noted that Claren Road’s flagship fund lost 10%.

Investor Recovery Options for LinnCO LLC (LNCO) Losses

December 31, 2015 | by Staff Attorney

The law offices of Gana Weinstein LLP continue to report on investor related losses and potential legal remedies due to unsuitable recommendations to investor in oil and gas and commodities related investments. LinnCO LLC (Ticker Symbol: LNCO) is a Master Limited Partnership (MLP). LinnCO has declined 91.7% in value from its 52-week high and is trading at only $1.21 a share. LinnCO business focuses in the oil and gas production sector.

About 86% of the total MLP securities market, a $490 billion sector, can be attributed to energy and natural resource companies. While MLPs have the same liquid trading characteristics as common stocks they are very different from typical stock investments. For instance, MLP’s are pass through investment vehicles, that is they pass through the income to the investor without any company level taxation. In addition, while there is no set payout level required to be adhered to by the company, unlike real estate investment trusts (REITs), MLP’s must derive 90% of their revenues from natural resources activities. However, most MLP’s do pay out most of their earnings through distributions causing company growth to come through the issuance of more debt and shares.

However, brokers that have recommended MLPs to investors may have made unsuitable recommendations based upon the yields of these investments rather than the risk to principal. Over the past year MLPs have been hammered due to weaknesses in oil and gas and commodities markets.

Investor Recovery Options for Hi-Crush Partners (HCLP) Losses

December 30, 2015 | by Staff Attorney

The law offices of Gana Weinstein LLP continue to report on investor related losses and potential legal remedies due to unsuitable recommendations to investor in oil and gas and commodities related investments. Hi-Crush Partners (Ticker Symbol: HCLP) is a Master Limited Partnership (MLP). Hi-Crush Partners has declined 85.6% in value from its 52-week high and is trading at only $5.81 a share. Hi-Crush Partners business focuses in the fracking sand production sector.

About 86% of the total MLP securities market, a $490 billion sector, can be attributed to energy and natural resource companies. MLPs contain significant risks. MLPs tend to fluctuate wildly with the price of oil and gas. For example in 2008, when oil plummeted in the wake of the great recession the AMZ MLP Index declined by 36.9% in a single year. In addition, MLPs often grow their distributions at an accelerated rate in their first two years in order to attract positive research reports from Wall Street analysts. The increased distributions and positive reports serve to drive the stock price higher even though the long term yield of these MLPs are speculative and unknown.

However, brokers that have recommended MLPs to investors may have made unsuitable recommendations based upon the yields of these investments rather than the risk to principal. Over the past year MLPs have been hammered due to weaknesses in oil and gas and commodities markets.

Oil and Gas Private Placement Losses: Investigation of Reef Oil and Gas Companies

December 21, 2015 | by Staff Attorney

Reef Oil and Gas Companies located in Richardson, Texas, is a sponsor of oil and gas private placements and investments. The investment attorneys at Gana Weinstein LLP continue to report on investor losses in oil and gas related investments, like Reef Oil and Gas.

Investors often do not appreciate the risks when investing in oil and gas private placements. Even before the collapse of oil prices it was rare for investors to make money on oil deals. According to Reuters, of 34 deals Reef Oil and Gas has issued since 1996, only 12 have paid out more cash to investors than they initially contributed. Reuters also found that Reef sold an additional 31 smaller deals between 1996 and 2010 taking $146 million from investors and only paying out just $55 million.

If investments in oil and gas private placements rarely succeed during oil booms, then they will certainly fail under current market conditions. According to Bloomberg, many oil companies are in trouble as U.S. high-yield debt issued to junk-rated energy companies grew four-fold to $208 billion. Most of these companies are now struggling to stay afloat with oil prices at $45. Many of these companies relied upon high energy prices in order to sustain their operations. As reported by the Wall Street Journal the drop in oil and energy prices and the industry downturn has made it difficult for many companies to refinance their debts.

FINRA Sanctions Broker Garrett Ahrens Over False Account Statements

November 8, 2015 | by Staff Attorney

The Financial Industry Regulatory Authority (FINRA) fined (Case No. 2013036001201) broker Garrett Ahrens (Ahrens) concerning allegations that the broker used false and misleading consolidated reports with clients.

According to FINRA’s BrokerCheck records Ahrens has been in securities industry since 1989. From June 1998 until August 2015, Ahrens was associated with LPL Financial LLC (LPL Financial). In August 2015, LPL Financial allowed Ahrens to voluntarily resign alleging that the broker potentially violated certain FINRA rules relating to the use of consolidated statements. In addition to the termination and FINRA complaint Ahrens has been subject to nine customer complaints over the course of his career. Many of the more recent complaints involve allegations of investments in limited partnerships, private placements, and non-traded real estate investment trusts (Non-Traded REITs) among other investments.

As a background, a Non-Traded REIT is a security that invests in different types of real estate assets such as commercial, residential, or other specialty niche real estate markets such as strip malls, hotels, storage, and other industries. There are also publicly traded REITs that are bought and sold on an exchange with similar liquidity to traditional assets like stocks and bonds. However, Non-traded REITs are sold only through broker-dealers, are illiquid, have no or limited secondary market and redemption options, and can only be liquidated on terms dictated by the issuer, which may be changed at any time and without prior warning.

Oil and Gas Investment Goodrich Petroleum Corp. Losses Exceed 90% In Last Year

November 4, 2015 | by Staff Attorney

The law offices of Gana Weinstein LLP are currently investigating brokerage firms that placed investors in oil and gas related investments and who have suffered losses as a result. One company under investigation is oil and gas producer Goodrich Petroleum Corp., (Goodrich) (Stock Symbol: GDP). Goodrich has gone through a number of negative events such as a credit downgrade, the company’s CFO resigned within a year of his predecessor, the chairman of the board announced his retirement for health reasons, and even Henry Goodrich, the company’s founder, has died. According to Bloomberg the company is laden with debt and investors are jockeying for position in a potential bankruptcy.

Recently, investors holding $158.2 million of Goodrich’s debt agreed to take 47 cents on the dollar in exchange for stock warrants for some note holders and a lien on Goodrich’s oil acreage. The purpose of the exchange was to place them in a better position if Goodrich liquidates its assets in bankruptcy.

Our offices continue to report on investment losses suffered by investors in energy and oil and gas related investments that brokerage firms have increasingly recommended to retail investors in recent years. According to Bloomberg, U.S. high-yield debt issued to junk-rated energy companies grew four-fold to $208 billion. Most of these companies are now struggling to stay afloat with oil prices at $45. Investors have been exposed to energy investments through a variety of investment vehicles including private placements, master limited partnerships (MLPs), leveraged ETFs, mutual funds, and even individual stocks.