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Articles Posted in Oil and Gas Claims

Pending Customer Disputes Involving David Lerner Associates Broker Rafael Klein Seek $300K in Damages

Rafael Scott Klein, a David Lerner Associates broker and Spirit of America Management Corp. investment advisor, may have unsuitably sold investments in Energy 11, LP to customers. Energy 11 is a non-traded limited partnership set up to acquire and develop natural gas and oil properties in the United States. It was marketed and sold through David Lerner Associates but is no longer available to new investors. 

According to BrokerCheck, Rafael Klein, who has been a David Lerner Associates registered representative for 15 years, is currently the subject of two pending customer disputes. 

Connecticut Investment Advisor is Also Part of RBC Team Chu, Philipps, and Associates  

Joseph Ijong Chu, an RBC Capital Markets stockbroker, has been named in a number of customer disputes this year. Chu is also a registered investment advisor with the broker-dealer. He is part of the RBC  team known as Chu, Phillips, and Associates, which offers products and services through City National Bank in Stamford, Connecticut. 

Chu’s customers are blaming him for the investment losses they suffered when he allegedly overconcentrated their accounts in risky oil and gas investments that were unsuitable for them. 

Investors May Have Been Subject to Unsuitable Recommendations & Misrepresentations

If you are a UBS customer whose broker persuaded you to invest in Noble Corporation, you likely have lost money. The offshore drilling company filed for Chapter 11 bankruptcy protection on July 31 in Houston, Texas. 

Noble Corp. took a huge financial hit this year as COVID-19 caused oil and gas prices to plunge in value, making oil wells below the sea too costly. However, the company’s financial woes did not stop UBS Financial Group from recommending Noble stock shares to investors all the way leading up to its bankruptcy filing.

Nine Energy Service Bonds Expected to Deteriorate Further

Nine Energy Service, Inc. (NINE) recently announced that the New York Stock Exchange (NYSE) found that the oilfield services company was once more in compliance with the stock exchange’s continued listing standard. 

The news comes less than two months after the NYSE notified the Houston-based company of its noncompliance with this standard after its common stock’s share price dropped to under $1/share over 30 trading days in a row. The $1/share price is the minimum closing price per share allowed for a stock to stay on the NYSE.

SSEK Investigating Financial Advisor That Recommended Unsuitable MLPs To Investors 

Shepherd, Smith, Edwards & Kantas, a law firm specializing in representing wronged investors, is looking into allegations against financial advisors that concentrated their clients in Alerian MLP ETF (“AMLP”) and other oil & gas related master limited partnerships (“MLPs”) amid the significant downturn in oil prices since February.  

What Is The AMLP Fund? 

ETF Investors Of United States Oil Fund May Not Have Known Full Extent Of Risks

Our investment fraud lawyers are offering free case consultations to investors who’ve lost money in the United States Oil Fund (USO) after it dropped 30%. The exchange-traded security continues to make changes to its structure in an attempt to stave off more losses. Part of this now involves giving itself the leeway to get into long-term contracts. The USO exchange-traded fund (ETF), which keeps track of oil prices, is popular among retail investors. 

Unfortunately, many of these investors think they are betting on oil prices’ long-term rise and do not fully comprehend how the futures market operates or that these types of funds hold primarily short-dated oil futures contracts and should never be held long-term. 

The Drop In Oil Prices Could Lead To Losses For Midstream MLP Investors 

With oil and energy stocks continuing to fall – Saudi Arabia’s threat to globally distribute millions of barrels of crude oil in order to win the oil price war over the United States and Russia has only exacerbated these declines. Investors may be wondering – what does this mean for Midstream Master Limited Partnerships (MLPs)? 

At Shepherd Smith Edwards and Kantas (SSEK Law Firm), our MLP investment fraud lawyers work with investors that have sustained significant losses caused by fraud or negligence. 

Enbridge Inc. (ENB) has consolidated its acquisition of master limited partnership (MLP) operations in Texas by approving the acquisition of all outstanding Enbridge Energy Partners LP (EEP) public Class A common units, as well as all outstanding Enbridge Energy Management LLC (EEQ) public listed shares. Two deals had been earmarked with an over $3.5B value when news of their pending purchase became public knowledge a few months ago.

Both MLPs will no longer be traded on the New York Stock Exchange (NYSE). They will now become Enbridge subsidiaries.

News of the completed acquisitions came just days after Enbridge fulfilled its acquisition of Spectra Energy Partners, which is also an MLP based in Houston. In September, Enbridge announced it would acquire what was left of Enbridge Income Fund Holdings Inc. (ENF), which is based in Canada.

The US Securities and Exchange Commission announced this week that Christopher Faulkner, a Texas businessman, will pay $23.8M to settle oil and gas charges involving an alleged over $80M securities scam that bilked hundreds of investors. Faulkner, who called himself the “Frack Master” and claimed to be an expert in hydraulic fracturing, is accused of setting up several companies and then selling interests in oil and gas prospects to investors in Texas and other US states.

The regulator contends that Faulkner:

  • “Systematically deceived” investors through offering materials that were “false and misleading.”

Last month, the Federal Energy Regulatory Commission announced plans to stop oil and gas pipelines from being able to structure themselves as Master Limited Partnerships (MLPs) in order to get an income tax allowance for rates that are cost-of-service. Under the existing model, MLP customers pay a price that is regulated, part of which takes care of corporate tax charges.

Master Limited Partnerships aren’t required to pay corporate taxes since they pass through entities that distribute pre-tax earnings to unitholders. The latter are the ones that pay the taxes.

Any new rule related to this matter would likely not go into effect until 2020. Still, the government agency’s news affected trading on a number of MLPs, including the Alerian MLP ETF (exchange-traded fund), Energy Transfer Partners, TC PipeLines, Williams Partners, Crossamerica Partners, and several others.

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