Securities Lawyers Blog
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. Milagro Oil & Gas and several of its affiliates filed for Chapter 11 bankruptcy protection in July 2015. At that time, Milagro Oil reported that it had $1 million to $10 million in assets and $500 million to $1 billion in liabilities that it would not be able to pay because its business became unprofitable in light of the decline in the oil market. The company has 1,200 wells in South Texas, Gulf Coast, and in Louisiana. The company plans to sell its oil and gas properties and liabilities to Houston-based White Oak Resources VI for $217 million in cash and equity.
Our firm continues to file complaints on behalf of investors who have been overconcentrated in oil and gas investments. 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. 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.
