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Nine Energy Service Investors May Have Grounds for Bond Fraud Claims to Recover Losses

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.

While the Houston-based company is reporting this as a positive, that does not change the fact that Nine Energy Service debt is still junk-rated and those holding NINE Energy bonds have suffered significant losses. 

If you are an investor that has suffered losses in Nine Energy Service bonds, please contact our bond fraud lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm) so that we can help you determine whether you have grounds for a claim to recover your losses. 

Nine Energy Service Junk Bonds Were Underwritten by Huge Wall Street Banks  

Nine Energy Service bonds were underwritten by Wells Fargo, J.P. Morgan, and Goldman Sachs. Moody’s Investor Services gave these bonds a B2 rating when they were issued, which already was 5 notches into junk territory. They’ve since been downgraded with a Caa1 rating, which is 7 notches into junk. Not only that, but their rating remains on a negative outlook and the expectation that they will default. 

This week, Seeking Alpha published an article that continued to report bad news about Nine Energy Service bonds, including how it’s high leverage only increases the risks involved especially when there is market volatility. Such turbulence has been rampant over the last few months in the wake of COVID-19 and its impact on the oil and gas sectors. 

Like Moody’s, Seeking Alpha is predicting further deterioration for Nine Energy Service during the second quarter. Already, the company and other oilfield service providers have been hit by the decrease in demand for their services after oil prices plunged and producers lost money. 

What Is Junk Bond Fraud?

Junk bonds are high risk and very speculative, and yet, they only grew in popularity and sales after COVID-19 struck. 

Although junk bonds can render high rewards, they may also lead to huge losses, as many investors of these low-quality bonds experienced.  Unfortunately, not all investors of Nine Energy Service bonds may have been apprised of the risks involved and/or these investments may never have been suitable for their portfolio, goals, or risk tolerance levels. 

Additionally, at least some Nine Energy bonds appear to have been privately issued and therefore should have been only available to Qualified Institutional Buyers (QIBs).  However, SSEK Law Firm has spoken with a number of investors who would not qualify as QIBs who were sold NINE Energy bonds from firms such as J.P. Morgan, one of the bond’s underwriters.

Bond Fraud Claims

Nine Energy Service bond investors who lost money may have grounds for filing a Financial Industry Regulatory Authority (FINRA) arbitration claim against the firm and broker that sold them these investments. 

Contact SSEK Law Firm to speak with one of our investor lawyers for your free, no-obligation case consultation. We have 30 years of experience representing clients who’ve suffered losses in the oil and gas sector and we have recovered many millions of dollars for investors throughout the US.

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