Energy 11, LP and Energy Resources 12, LP
Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) represents investors who have suffered losses in Energy 11, LP and Energy Resources 12, LP. The two non-public limited partnerships were set up to acquire and develop oil and gas natural properties.
They are sold exclusively by broker-dealer David Lerner Associates and its registered representatives to the firm’s customers. According to prospectus information for these investments, the brokerage firm is paid 6% in commissions, as well as up to 4% of the gross proceeds of the units sold as contingent incentive fees.
To date, David Lerner Associates has reportedly earned many millions of dollars from Energy 11 and Energy 12, LPs. Unfortunately, both appear to have been unsuitably recommended to many of the firm’s investors. Not only that but the firm's brokers have allegedly made misrepresentations and omissions about the risks involving these limited partnerships. The oil, gas, and energy sectors of the market can be highly volatile.
Our experienced Energy 11 and Energy Resources 12 securities fraud lawyers are offering free case consultations to investors who have suffered significant investment losses. Contact SSEK Law Firm at (800) 259-9010.What is Energy 11, LP?
Established in 2013, this Delaware non-public limited partnership has raised over $350M in investor funds, with the proceeds going to approximately 247 future development locations and non-operated working interests in about 221 producing wells in the Sanish Field in North Dakota. Sold as private placements, Energy 11 should only be recommended to high-net-worth individual investors.
Yet, this investment has been sold to retail investors, retirees, and inexperienced investors, many of whom lacked the sophistication to understand the risks and did not have the risk tolerance level to withstand the volatility that can come with investing in an oil and natural gas investment.
In December 2020, Energy 11 announced that it was permanently suspending investor distributions. In its Form 8-K filing to the Securities and Exchange Commission (SEC) in January 2021, the limited partnership reported an estimated per common unit value of its common units to be $7.23/share as of 12/31/2020. This was a more than 50% drop from the $19 or $20/unit offering share price. Energy 11 prices continued to drop after oil prices declined even further during COVID-19.What Are Energy Resources 12, LP?
This Delaware non-public limited partnership was founded in 2016. According to its Form 10-Q filing with the SEC, as of March 31, 2019, Energy Resources 12 owned an approximate 6% non-operated working interest in 277 producing wells, 33 wells in various stages of the drilling and completion process, as well as future development locations referred to as the Bakken Assets in North Dakota.
Like Energy 11, Energy Resources 12 is not a suitable recommendation for retail investors, conservative investors, most older investors, and inexperienced investors.Energy 11 and Energy Resources 12 FINRA Arbitration Claims Allege Unsuitability
Already, many investors have filed FINRA arbitration claims against David Lerner Associates for losses they’ve suffered in Energy 11 or Energy Resources 12. This includes:
- A $999,999 customer dispute against the broker, Lawrence Merl over Energy 11
- A $300,000 investor fraud case against David Lerner Associates registered representative Martin Lerner involving Energy Resources 12 and Spirit of America Energy Fund (SOAEX), which is another investment that the brokerage firm markets to its customers; and other investment fraud disputes.
This is not the first time that David Lerner Associates has been blamed for investor losses for products that were sold exclusively to its customers. The Apple REIT (real estate investment trust) line, of which the firm was the sole underwriter, also was the subject of many investor fraud claims alleging unsuitable investment recommendations that led to significant losses.Seasoned Energy 11 and Energy Resources 12 Fraud Attorneys
Brokerage firms have a duty to properly supervise their registered representatives and make sure that any product or trading strategy that they recommend is suitable for each customer. Broker-dealers and brokers also must make sure not to overconcentrate a client’s account in any one particular product, which is what many Energy Resources 12 and Energy Resources 11 investors are alleging happened to them.
To determine whether you have grounds for a FINRA arbitration claim against David Lerner Associates over your oil and energy gas investment fraud losses, contact our knowledgeable Energy 11 and Energy Resources 12 investment fraud attorneys at SSEK Law Firm today. Call (800) 259-9010 or reach us online.