Tag Archives: Denver

Oil / Gas Investment and Tax Loss

Oil StockSome Energy, Oil and Gas investments can only legally be sold to a limited section of the investing public.  If you suffered losses we may be able to  help.  Contact us at 303-300-5022 or 1-866-817-0201 (toll-free) for a free consultation.

Oil and gas investors do not have to sit and watch their life savings diminish.  These investors have rights though many are unaware of the recourse they have for such losses.

Many investors have received high pressure sales of oil and gas investments.  Brokers and other investment professionals like to sell these types of investments because they usually pay a very high commission.  These commissions can be 10 to 20 times higher than the commission on your average stock sale.  The high commissions will often cause these individuals to ignore the rules in the sale of such investments. The two rules that are usually ignored are those concerning accreditation and suitability.

Oil and gas limited partnerships can generally only be sold to “accredited” investors.  Such investors are individuals whose liquid net worth, their net worth excluding their home, is in excess of $1 million. The second rule that is commonly violated in the sale of such investments is the suitability rule.  Oil and gas investments are known by investment professionals to generally be very high risk investments.  Investments need to be consistent with the level of risk that an investor is willing or able to take.  For example, a person approaching or in retirement or who cannot otherwise afford to take high levels of risk with their investments could not legally be offered an oil and gas investment.

Likewise, an individual who expresses a desire for conservative or moderate investments would not be a suitable investor. There are many other rules that can potentially be violated in the sale of oil and gas investments.

Problems exist not just with the investment losses, but also with the tax consequence of investing in these companies.  A detailed description is found in the following Link to Forbes.   In short, these investments are partnerships.  When debt is defaulted upon by a partnership, and the lender “writes off” the debt, the write off means that the owners (the investors) are taxed as if they received the amount written off as income.  Considering some limited partnerships defaulted on billions in loans, the tax obligation of investors is substantial.

If you have any questions, please feel free to give us a call.  These rules apply no matter if you invest in individual oil or gas investments or invest through a mutual fund or master limited partnership (MLP).

Common oil and gas investments we see recoverable losses include Linn Energy (“LINE” or “LNCO”) and more information can be found at www.jpedersonlaw.com/blog/linn-energy-losses/, Williams Companies (“WMB”), Penn West Petroleum (“PWE”), BP Prudhoe Bay Royalty Trust (“BPT”), Breitburn Energy Partners, LP (“BBEP”), Hawthorne, SandRidge Energy, Williams Ridgewood Energy, Apco, Atlas Energy, Midstates Petroleum, Peabody Energy, Resolute Energy, XXI Energy, Nobel, Permian Basin, and Breitling Energy.  Some of these losses may be recoverable by class action while others may require individual FINRA arbitration suits.

More information on SandRidge can be found at this link.

Oil Stock IIJeffrey Pederson is an attorney who works with investors to recover losses in FINRA arbitration and has represented investors in Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut , Florida, Hawaii, Illinois, Indiana, Massachusetts, Montana, New Jersey, New Mexico, New York, North Carolina, Maryland, Minnesota, Missouri, Montana, North Dakota, Rhode Island, Texas, Utah, and Wyoming, in FINRA arbitration actions against securities brokerage firms for unsuitable investments.  Please call for a confidential and free consultation.

Kelly Clayton Althar

Kelly Clayton Althar has been barred from the securities industry for excessive trades and recommending and purchasing investments that were too high of a risk for the broker’s investors.

The allegations to which Althar consented, without admitting or denying fault, are that between April 2011 and March 2014 the broker made unsuitable recommendations and engaged in excessive trading in two accounts held by an elderly customer.  Althar engaged in high volume trading to generate commissions and over concentrated a client’s accounts in risky securities, despite the fact that the client was close to retirement and wanted only low risk investments. Althar’s trading decimated the client’s accounts, which constituted the bulk of her net worth and retirement savings.

During the Relevant Period, Althar often purchased, sold, and subsequently repurchased the same security in CN’s accounts within a short period oftime. For example, on December 26, 2012, Althar purchased 696 shares of American Capital Agency Corp. (“AGNC”), a REIT, for $21,559.09 and sold those shares, at a loss, two months later on February 28,2013, for $21,298.50. He then re-purchased 782 shares of AGNC two months later after the price had risen, for $26,756.36. and then sold those shares, at a significant loss, six weeks later for $18,619.03. On those four trades, on which CN lost over $8,000 in a matter ofmonths, Althar generated over $3,000 in commissions.

A link to the AWC can be found at the following link.

Althar had previous pled no contest to a charge for felony grand theft and was sentenced to a 30-day work program and 36 months probation.

 

Ameritas Broker Theft and Other Losses

If you have suffered losses, believe funds are missing from your account, or had funds stolen while with Ameritas Investment Corp., please call the Law Offices of Jeffrey Pederson at 1-866-817-0201 for a free consultation with an attorney.

We are currently investigating losses and missing funds of Ameritas investors due to inadequate supervision of Ameritas brokers.  Ameritas recently submitted an AWC, a settlement with regulators, in which the firm was censured and fined $50,000. Without admitting or denying the findings, the firm Stock handcuffsconsented to the sanctions and to the entry of findings that it failed to adequately monitor and otherwise supervise a registered representative’s activities. The findings stated that the firm did not detect that the representative changed a customer’s address of record to the address of the representative’s branch office, and then requested disbursements from the customer’s account to the new address of record. The customer did not authorize either the address change or the disbursement of funds. As a result, the firm sent funds from the customer’s account to the branch office, where the representative misappropriated the money. The firm’s supervisory systems and procedures at the time were not sufficient to adequately monitor its representative’s requests to change the customer’s address of record without her knowledge and to disburse funds to her new address.

Recovery of ARCP Losses

If you have suffered losses in ARCP, please call 1-866-817-0201 to speak to an attorney about potential recovery of your losses.

guy in handcuffsThe Department of Justice and the Securities Exchange Commission on September 8, 2016 charged the former chief financial officer of American Realty Capital Properties Inc., (“ARCP”) a large traded REIT now known as Vereit Inc., with overstating the financial performance of the company by purposefully inflating a key metric used by analysts and investors to assess ARCP.

According to the SEC’s complaint, ARCP’s former CFO, Brian S. Block and then chief accounting officer Lisa McAlister devised a scheme to manipulate the calculation of the REIT’s adjusted funds from operations, or AFFO, a non-GAAP measure used when the company provided earnings guidance.

Block was arrested Thursday morning on conspiracy, securities fraud, and other charges at his home in Hatfield, Pa., according to a statement from the U.S. Attorney’s Office for the Southern District of New York.

McAlister pled guilty on June 29, 2016 to one count of conspiracy to commit securities fraud and other offenses, including one count of securities fraud, one count of making false filings with the SEC, and one count of making false statements in a matter within the jurisdiction of the executive branch of the U.S. government. The securities fraud and false filings charges each carry a maximum prison term of 20 years. The conspiracy and false statements charges each carry a maximum prison term of five years.

Jeffrey Pederson, PC represents investors in the recovery of investment losses through fraud and mismanagement.  Most cases resolve by means of FIRNA arbitration.

Information for this post obtained from Investmentnews.com.

David B. Tysk of Ameriprise Investment Loss

If you suffered investment loss with David B. Tysk please call 1-866-817-0201 for a free consultation.

David Tysk, financial advisor for Ameriprise in Eden Prairie, MN, was fined $50,000 and
suspended from association with any FINRA member in any capacity for one year. The
Invest photo 2NAC affirmed the findings in the OHO decision and increased the sanctions. The sanctions
were based on findings that Tysk altered computer notes of customer contacts after the
customer complained about the suitability of a recommendation.

The findings stated that Tysk knew or should have known the importance of customer-related notes in the event of complaints. Tysk’s concealed alterations of his notes did not comply with the clear import of the document-retention policies in his member firm’s code of conduct. Tysk failed toinform the firm of the alterations when he provided a copy of the notes to be produced in discovery during an arbitration proceeding.

The customer became suspicious of the notes and requested further discovery to determine whether the notes had been altered after he lodged his complaint with the firm. Tysk and his firm opposed the requests. In a meeting to prepare for the arbitration hearing, Tysk finally disclosed to the firm that he had altered the notes. At the conclusion of the arbitration hearing, the firm and Tysk were sanctioned for violating arbitration discovery rules.

A copy of the NAC decision can be found at the following link.

Investors with Bonanza Creek Losses

Bonanza Creek has suffered deep declines lately but investors purchasing Bonanza Creek as part of their moderate to conservative portfolio may have recourse.  Please call 1-866-817-0201 for more information.

Shares of Bonanza Creek Energy were battered Wednesday, July 13, after the Colorado oil and gas producer disclosed it had hired a financial specialist to help it explore alternatives, including a restructuring.

Bonanza Creek, said it had retained Perella Weinberg Partners, a New York firm known for working with financially troubled companies to avoid bankruptcy or planning for bankruptcy.

The market didn’t react well to the news. Shares of Bonanza Creek, which closed at $2.28 on Tuesday, plunged to as low as $1.14 before crawling back to end trading Wednesday at $1.44 a share, a 36.8 percent decline.

Shares of the company had traded above $60 in August 2014, a few months before Saudi Arabia said it would no longer limit its production to support prices. That set off a steep descent in oil prices from above $100 a barrel to briefly under $30 when Iranian producers re-entered the market, forcing prices down even further.

Oil is now back around $45 a barrel. But lenders are reducing the credit they are willing to extend to producers given the lower value of their oil and gas reserves.

Bonanza Creek said in late May that the amount it could borrow under its credit agreement was cut from $475 million to $200 million. That was a problem because the company had borrowed $288 million, leaving it with a deficit of $88 million.

Bonanza Creek, like many petroleum producers, initially turned to the equity markets to help it stay afloat. The company raised more than $200 million in a secondary offering back in February 2015 to investors willing to pay $26 a share.

The Denver Post of July 14, 2016 provided information for this post.

Geneos Wealth Management

The brokerage based in Centennial, Colorado entered into an Acceptance, Waiver and Consent agreement, a settlement agreement for alleged wrongdoing, with FINRA on October 30, 2015 concerning the sale of limited partnership investments by its brokers.

If you lost funds dealing with Geneos representatives and believe the losses were due to wrongdoing please call 1-866-817-0201 for a free consultation.

Geneos consented to the sanctions and to the entry of findings that it failed to supervise representatives at a branch office in Draper, Utah who were participating in the execution of securities transactions, namely investments in the form of limited partnership interests, as part of their disclosed outside advisory activities.

The findings stated that the Geneos Invest photo 2representatives’ participation included, but was not limited to, meeting with and recommending the underlying securities to customers, providing customers with copies of the private placement memorandum and related paperwork, assisting customers with completing the investment paperwork, accepting the completed paperwork and investment funds, and receiving compensation. The firm also failed to record the transactions on its books and records.

One issue with the recommendation of such investments is the fact that such investments are highly aggressive and only suitable for limited numbers of investors who are willing to take such high risks with their savings.  Representatives have a compelling reason to sell such high risk investments due to the significantly higher commissions that such investments pay.  A firm selling such investments has a duty to verify the suitability of such investments and may have legal liability when such investments are sold to investors who were only willing to take moderate risks.

A link to the AWC can be found at the following: http://disciplinaryactions.finra.org/Search/ViewDocument/63683

 

Losses at LPL Financial

LPLIf you have lost money with LPL you may be entitled to recovery of some or all of your losses.  Please call 1-866-817-0201 toll-free to speak to a lawyer for more information.

In May 2016, LPL broker Brian David Smit of Sioux Falls, South Dakota was barred from the securities industry.  This was pursuant to an agreement reached between Smit and FINRA regulators, an agreement referred to as an “AWC.”  The allegations concerned the sale of unapproved private securities.  His record also reflects that Smit was under investigation for such sale when he left LPL.  The sale of unapproved investments is a matter of concern since it is commonly a vehicle for fraud.

On May 6, 2015, the Financial Industry Regulatory Authority Inc. (“FINRA”), ordered LPL Financial to pay $11.7 million in fines and restitution for what it deemed “widespread supervisory failures” related to sales of complex investment products.  Such products are suitable for only a limited portion of the investing public and FINRA prohibits the sale of such products to investors to whom such investments would not be suitable.

From 2007 to as recently as April 2015, LPL failed to properly supervise sales of certain complex investments, including certain exchange-traded funds (“ETFs”), variable annuities and nontraded real estate investment trusts (“REITs”), and also failed to properly deliver more than 14 million trade confirmations to customers, according to the regulator.

LPL did not have a system in place to monitor the length of time customers held securities in their accounts or to enforce limits on concentrations of those complex products in customer accounts, FINRA said.  Such issues can lead to the sale of unsuitable investments and put such portfolios in a position of greater risk than the investor may have wanted or could afford to take.

The systems that LPL had in place to review trading activity in customer accounts were plagued by “multiple deficiencies,” Finra said. The firm failed to generate proper anti-money laundering alerts, for instance, and did not deliver trade confirmations in 67,000 customer accounts, according to the settlement letter.

The regulator also charged the firm for failing to supervise advertising and other communications, including brokers’ use of consolidated reports.

The penalty includes a $10 million fine and restitution of $1.7 million to customers who were sold certain exchange traded funds (“ETFs”). FINRA said the firm may pay additional compensation to ETF purchasers “pending a review of its ETF systems and procedures.”  As such, investors should speak to an attorney to maximize recovery of losses.

Content from this post from Investmentnews.com.

 

Variable Annuity Fraud

We help investors who believe that they are victims of variable annuity fraud.  Variable annuity fraud has always been a frequent trick of brokers looking to put their own interests ahead of their investors (often by selling to those approaching retirement which is generally an unsuitable recommendation).  The investments pay an extremely high commission and the investments are only suitable for a small section of the investing public.  This fraud hit a new low last week.

As reported in http://www.investmentnews.com/article/20140313/FREE/140319954, the Securities and Exchange Commission Thursday, March 13, 2014, filed charges against a group of brokers in a scheme wherein investors used variable annuities to wager on the lives of the terminally ill.

The brokers in question were Michael A. Horowitz of Los Angeles and Moshe Marc Cohen of Brooklyn, N.Y.

The brokers allegedly obtained the personal health and identification data of the dying patients through fraud, marking them as annuitants on variable annuity contracts that he had marketed to wealthy clients, according to the SEC’s complaint.  Under false pretenses, the brokers allegedly received their employers’ approval to sell the annuities.  The motivation with this plan, as with most fraudulent sales of variable annuities was the commission.  Variable annuities pay as large of a commission as just about any investment product that you can purchase through a securities brokerage.  The brokers reaped approximately $1 million in commissions from their sale, the SEC claimed, with Mr. Horowitz obtaining more than $300,000 and Mr. Cohen became unjustly enriched to the tune of more than $700,000.

If you have lost money with these or any other brokers you believe may have defrauded or mismanaged you portfolio call 303-300-5022.