Oil and Gas

Previously Registered Broker Laurence Greene Subject to Unsuitable Oil and Gas Securities Complaints

October 25, 2018 | by Staff Attorney

The securities attorneys at Gana Weinstein LLP are currently investigating previously registered broker Laurence Greene (Greene). According to BrokerCheck Records held by the Financial Industry Regulatory Authority (FINRA), Greene has been subject to two pending customer disputes concerning unsuitable investments.

Most recently, in May 2018, a customer alleged that Greene placed the customer’s funds into risk oil and gas securities which were unsuitable to to the customer’s investment objectives. In addition, the customer alleges churning of the account. This dispute is currently still pending.

In November 2017, a customer alleged that during 2013, Greene placed the customer in unsuitable investments, churned the account, breached fiduciary duty and excessively traded the accounts. The customer has requested $375,000 in damages. This dispute is currently still pending.

Our firm handles claims and is also investigating 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 (MLPs), leveraged ETFs, mutual funds, and individual stocks.

Matthew Paolucci Subject to Multiple Customer Complaints Alleging Unsuitable Investments

July 4, 2018 | by Staff Attorney

The securities attorneys at Gana Weinstein LLP are investigating claims against CUNA Brokerage Services, Inc. (CUNA Brokerage) broker Matthew Paolucci (Paolucci). According to BrokerCheck records, Paolucci has been subject to three customer complaints, one of which is still pending. The majority of these complaints concern recommendations of unsuitable investments.

Most recently, in September 2017, a customer alleged that from 2008 to 2015, Paolucci recommended unsuitable investments from a wide range of securities. The customer has requested $200,000 in damages. This dispute is currently still pending.

In July 2016, a customer alleged that in 2012, Paolucci recommended unsuitable recommendations in oil and gas securities. The customer requested $18,829.27 in damages.

FSC Securities Broker Brian Presley Subject to Multiple Alternative Investment Complaints

May 29, 2017 | 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 current FSC Securities Corporation (FSC Securities) broker Brian Presley (Presley). According to BrokerCheck records, Presley has spent 34 years in the securities industry and is currently located in Punta Gorda, Florida operating under the d/b/a The Presley Advisory. Over his career, Presley has been the subject of at least eight customer complaints and two regulatory actions.

The most recent complaint was filed in August 2015 alleging that Presley breached his duties to his clients in illiquid investments including oil and gas and non-traded REIT’s. The customer alleged $117,000 in damages. The claim has been settled. Many of Presley’s other customer complaints similarly allege damages resulting from the sale of alternative investment products.

Our firm often handles cases involving direct participation products (DPPs) and private placements including oil and gas partnerships, non-traded real estate investment trusts (REITs), and other alternative investments.

Wunderlich Securities Broker Howard Brous Has 14 Regulatory Sanctions

January 26, 2017 | by Staff Attorney

Our securities fraud attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Howard Brous (Brous) currently associated with Wunderlich Securities, Inc. (Wunderlich) alleging unsuitable investments, common law fraud, and breach of fiduciary duty among other claims. According to brokercheck records Brous has been subject to six customer complaints, 14 regulatory sanctions, and one employment separation for cause. The majority of Brous’ regulatory sanctions involve multiple state regulators seeking heightened supervision plans and otherwise restricting Brous’ activities.

In August 2016 a customer filed a complaint stating that they had maintained an account with Brous for over 10 years and that his accounts were over concentrated in unsuitable securities. The customer alleged damages of $2,500,000. The claim is currently pending.

Brokers in the financial industry have the fundamental responsibility to treat investors fairly. This obligation includes making only suitable investments for their client. The suitable analysis has certain requirements that must be met before the recommendation is made. First, there must be reasonable basis for the recommendation for the investment based upon the broker’s and the firm’s investigation and due diligence. Common due diligence looks into the investment’s properties including its benefits, risks, tax consequences, the issuer, the likelihood of success or failure of the investment, and other relevant factors. Second, if there is a reasonable basis to recommend the product to investors the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives. These factors include the client’s age, investment experience, retirement status, long or short term goals, tax status, or any other relevant factor.

Customers File Complaints Against Bruce Slater Involving REITs, Oil and Gas, and Variable Annuities

May 27, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating a customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Bruce Slater (Slater). According to BrokerCheck records Slater has been subject to at least four customer complaints. The customer complaints against Slater alleges securities law violations that including unsuitable investments and misrepresentations among other claims. Many of the complaints involve direct participation products (DPPs) and private placements including oil and gas partnerships – including Ridgewood Energy-, non-traded real estate investment trusts (REITs), variable annuities, and other alternative investments.

Our firm has represented many clients in these types of products. All of these investments come with high costs and historically have underperformed even safe benchmarks, like U.S. treasury bonds. For example, products like oil and gas partnerships, REITs, and other alternative investments are only appropriate for a narrow band of investors under certain conditions due to the high costs, illiquidity, and huge redemption charges of the products, if they can be redeemed. However, due to the high commissions brokers earn on these products they sell them to investors who cannot profit from them. Further, investor often fail to understand that they have lost money until many years after agreeing to the investment. In sum, for all of their costs and risks, investors in these programs are in no way additionally compensated for the loss of liquidity, risks, or cost.

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.

Customer Complaints Involving Alternative Investments Against Broker Robert Cannon

May 23, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating a customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Robert Cannon (Cannon). According to BrokerCheck records Cannon has been subject to at least four customer complaints. The customer complaints against Cannon alleges securities law violations that including unsuitable investments, negligence, fraud, and breach of fiduciary duty among other claims.

Many of the complaints involve direct participation products (DPPs) and private placements including oil and gas partnerships, non-traded real estate investment trusts (REITs), and other alternative investments. In a FINRA regulatory action Van Patter was found to have onverconcentrated an investor in alternative investments.

Our firm has represented many clients in these types of products. All of these investments come with high costs and historically have underperformed even safe benchmarks, like U.S. treasury bonds. For example, products like oil and gas partnerships, REITs, and other alternative investments are only appropriate for a narrow band of investors under certain conditions due to the high costs, illiquidity, and huge redemption charges of the products, if they can be redeemed. However, due to the high commissions brokers earn on these products they sell them to investors who cannot profit from them. Further, investor often fail to understand that they have lost money until many years after agreeing to the investment. In sum, for all of their costs and risks, investors in these programs are in no way additionally compensated for the loss of liquidity, risks, or cost.

Former RBC Broker Lisa Lowi Has Over a Dozen Energy Bond Related Customer Complaints

May 14, 2016 | by Staff Attorney

The securities lawyers of Gana Weinstein LLP are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against broker Lisa Lowi (Lowi). According to BrokerCheck records Lowi has been subject to at least 21 customer complaints with approximately 18 of those complaints being filed in the last two years. The recent customer complaints against Lowi allege securities law violations including unsuitable investments that relate to concentrations in energy bond related investments. The complaints in total allege millions in investor losses and damages

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. 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. Nonetheless, 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.

Before recommending investments in oil and gas and commodities related investments, brokers and advisors must ensure that the investment is appropriate for the investor and conduct due diligence on the company in order to understand the risks and prospects of the company. Many of these companies relied upon high energy prices in order to sustain their operations.

Andrew Yocum Customers Complaint About Unsuitable Oil and Gas Investments

March 20, 2016 | by Staff Attorney

The investment attorneys of Gana Weinstein LLP are investigating investor claims of unsuitable investments in oil and gas related products. Our firm is currently representing a number of investors who lost substantial savings due to poor advice to concentrate holdings in speculative commodities investments like master limited partnerships (MLPs). According to Brokercheck records, Andrew Yocum (Yocum) formerly with Morgan Stanley operating from their offices in The Villages, Florida has recently received at least 12 customer complaints with similar allegations that the broker overconcentrated them in oil and gas equities. Eight complaints have been filed against Yocum in 2016 alone.

One of the most popular energy related investments that have become increasingly popular in the brokerage industry in recent years are MLPs. MLPs are publicly traded partnerships. About 86% of the total MLP securities market, a $490 billion sector, can be attributed to energy and natural resource companies. There are about 130 MLPs trading on major exchanges that focus on energy related industries and natural resources.

Wall Street loves MLPs because they provide high yields to investors and require companies to pay Wall Street in order to continue to grow. In 2013 banks earned fees of $890.3 million from MLP issuance. Bloomberg quoted an analyst stating that “MLPs are Wall Street’s dream,” because “[t]hey’re fee machines.” Naturally, in order to entice investors to continue to invest in MLPs Wall Street pumps up MLPs every chance they get. According to Bloomberg, in May 2014 “[a]nalysts predict that 93 of the 114 MLPs in existence will rise in value in the next year…” Astonishingly, “all but five MLPs are recommended by the majority of the analysts who cover them.” At that time professionals without conflicts called MLPs “the next great investment debacle” and warned that “many MLP shareholders…may not understand what they’ve gotten into.”

Baytex Energy Corp. (BTE) Investor Loss Recovery

March 19, 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 Baytex Energy Corp. (Stock Symbol: BTE). Over the past two years the trust has suffered a 93% loss in value.

Baytex Energy Corp. is an oil and gas company based out of Calgary, Alberta. The company’s business is engaged in the acquisition, development, and production of crude oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States.

Our clients tell us similar stories that their advisors hyped oil and gas and commodities 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 investments 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.

Broker Investigation: William Berg Unsuitable Oil and Gas Investments

March 11, 2016 | by Staff Attorney

The investment attorneys of Gana Weinstein LLP are investigating investor claims of unsuitable investments in oil and gas related products. Our firm is currently representing a number of investors who lost substantial savings due to poor advice to concentrate holdings in speculative commodities investments like master limited partnerships (MLPs). According to Brokercheck records, William Berg (Berg) with Wells Fargo Advisors, LLC (Wells Fargo) has recently received a customer complaint alleging overconcentrated positions in oil and gas equities.

As a background, MLPs are publicly traded partnerships. About 86% of the total MLP securities market, a $490 billion sector, can be attributed to energy and natural resource companies. There are about 130 MLPs trading on major exchanges that focus on energy related industries and natural resources.

Wall Street loves MLPs because they provide high yields to investors and require companies to pay Wall Street in order to continue to grow. In 2013 banks earned fees of $890.3 million from MLP issuance. Bloomberg quoted an analyst stating that “MLPs are Wall Street’s dream,” because “[t]hey’re fee machines.” Naturally, in order to entice investors to continue to invest in MLPs Wall Street pumps up MLPs every chance they get. According to Bloomberg, in May 2014 “[a]nalysts predict that 93 of the 114 MLPs in existence will rise in value in the next year…” Astonishingly, “all but five MLPs are recommended by the majority of the analysts who cover them.” At that time professionals without conflicts called MLPs “the next great investment debacle” and warned that “many MLP shareholders…may not understand what they’ve gotten into.”