Bradford Energy Capital Oil and Gas Private Placements

shutterstock_146470052The investment attorneys at Gana Weinstein LLP are investigating the potential unsuitable sales of securities sponsored by Bradford Energy Capital (Bradford).  Bradford claims on its website that the company was formed in 1994 to focus on creating investment opportunities in the the oil and natural gas industry.  Bradford Exploration, Inc., Bradford Energy, LLC, and Bradford Energy Capital, LLC have been the managing general partner of 42 limited partnerships which investing more than $270 million in approximately 2,000 oil and natural gas wells, natural gas processing plants, natural gas pipelines, mineral leases, and royalty interests.  Bradford is active in the Appalachian Basin, the Illinois Basin, the Permian and the Western Gulf Basins, and the Williston Basin.

The company sponsors many oil and gas private placements and investments that incorporate Bradford Drilling Associates into the name.  According to public disclosures, brokerage firms that sell Bradford oil and gas interests include Centarus Financial Inc., Commonwealth Financial Network, Sigma Financial Corporation, Sammons Securities, Madison Avenue Securities, Inc, M Financial Holdings Securities, Inc., Lincoln Investment Planning, Berthel Fsher & Company Financial Services Inc., Kalos Capital, Inc., G.F. Investment Services LLC, and Sethi Financial among others.

Investors often do not understand the substantial risks of oil and gas limited partnerships and private placements.  As recently reported in Reuters, when offerings by Atlas Energy LP, another issuer of oil and gas private placements were analyzed, investors only get to see 65-70% of their capital actually put to work on oil and gas projects.  Further, the returns on these projects had more in common with running profitable casinos than investments. Reuters found that slightly more than half of 43 private placements Atlas issued over the past three decades investors lost money or just broke even. While investors lost in more than half of the deals in 29 or 67% of those deals, Atlas actually out-performed their own investors.

The costs and structures of many oil and gas private placements are very similar which cause these programs to fail at alarming rates even when oil and gas values trade favorable.  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.  Oil and gas and commodities related investments have been recommended by brokers under the assumption that commodities prices would continue to go up.  However, brokers who sell oil and gas and commodities products are obligated to understand the risks of these investments and convey them to clients.

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 (MLPs), leveraged ETFs, mutual funds, and individual stocks.  Investors who have suffered losses may be able recover their losses through securities arbitration.  Our consultations are free of charge and the firm is only compensated if you recover.

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