FINRA Arbitration Claim Seeks $250K in Damages, Possibly Involving Energy 11 LP
An investor has filed a Financial Industry Regulatory Authority (FINRA) arbitration claim naming David Lerner Associate, Glenn Howard Werner. Seeking $250K in damages, the claimant contends that misrepresentations and omissions, unsuitable investment recommendations, and a breach of fiduciary duty occurred.
While not specified in Werner’s BrokerCheck, some sources report that mutual funds and energy investments, including Energy 11, LP may have been involved.
David Lerner Associates in Trouble for Energy 11 and 12 LP Sales
Energy 11, LP is one of broker-dealer David Lerner Associates’ proprietary products that it offers exclusively to its customers. A public non-traded limited partnership related to oil and gas, the investment was set up to acquire and develop oil and natural gas properties. Energy 11 has raised over $350M and invested proceeds in non-operated working interests, producing wells, and future development locations in Mountrail County, North Dakota.
Like David Lerner Associates’ Energy Resources 12, LP, another proprietary investment also related to oil and gas, Energy 11 is not suitable for just any type of investor. They are highly illiquid and subject to the turbulence impacting the oil, gas, and energy arenas, such as what happened when COVID-19 drove down the demand and price of oil last year.
Meanwhile, David Lerner Associates has been paid 6% sales commissions for selling Energy Resources 12 and Energy 11 to its own customers, “4% of the gross proceeds of the common units sold,” and incentive payments.
Brokers have also received compensation for holding seminars and making presentations at trade shows for prospective investors. Now, Energy 11 has stopped paying dividends and suspended distributions last year.
Energy 11 LP Distributions Have Been Suspended Indefinitely
In December 2020, Energy 11 shareholders received a letter notifying them that distributions would be accrued indefinitely, meaning at least during the early part of 2021 investors should not expect to receive them.
In January, Energy 11 filed a Form 8-K with the US Securities and Exchange Commission (SEC) announcing that its estimated NAV (net asset value) per common unit as of December 31, 2020, was down to $7.23. Energy 11’s estimated NAV per common unit at the same time the year before was $13.82.
During Glenn Werner’s seven years in the industry, he has been a David Lerner Associates broker. There are four other disclosures on his BrokerCheck. They are all judgments/liens.
Experienced Energy 11, Energy Resources 12, and Spirit of America Energy Fund (SOAEX) Lawyers
Our securities fraud attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) are pursuing investor claims against David Lerner Associates on behalf of those who’ve suffered losses from Energy 11, Energy Resources 12, and Spirit of America Energy Fund.
All three of these investments should only have been recommended to customers for whom they were appropriate according to their investing goals, risk tolerance level, portfolio, age, and other criteria. Recently, SSEK Law Firm filed a FINRA arbitration case against David Lerner Associates after its broker Mike Norton unsuitably recommended Energy 11 to a New York retiree who ended up losing money.
For over 30 years, SSEK Law Firm has helped thousands of investors to recover losses sustained due to broker-dealer negligence or misconduct. Call (800) 259-9010.