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Articles Posted in Oil & Gas Fraud

Former broker and investment advisor Charles Bernard Lynch, Jr. (CRD #3004877) has been barred by FINRA after 57 customer disputes have been filed against him. His last employer of record was Wells Fargo Clearing Services (aka Wells Fargo Advisors, CRD #19616), where he was employed from 10/05/2012 through 05/02/2016. He was a general securities representative, and was discharged from the firm on April 12, 2016. Since his termination, he has not been associated with any other financial services firm.

Lynch’s previous employment record includes:

  • Morgan Stanley (CRD #149777) of Brea, CA, from 06/01/2009 through 10/24/2012

Silver Law Group continues to investigate investments in oil, gas, and energy companies made by clients through master limited partnerships (“MLPs”) at the recommendation of their brokers. As a result of high oil prices over the past few years, there has been a heightened interest in investments in oil and gas using MLPs. Now with the drop in the price of oil and gas, investors who may have been looking for conservative investments without significant risk are facing substantial drops in their portfolios.  Investors are further discovering that conflicts of interest between the investment bank, trading desk, and individual advisor influenced stockbroker’s recommendations.

These alternative investments in oil and gas typical take the form of Master Limited Partnerships (“MLPs”). These types of alternative investments have historically been extremely risky investments that demand a careful suitability analysis and due diligence by financial processionals before they are recommended to the public.  More often than not, broker-dealers and brokers are enamored with these types of investments because they, like other alternative investments, also tend to pay high commissions.

In a recent Financial Industry Regulatory Authority (“FINRA”) arbitration proceeding, RBC Capital Markets and its broker Bruce Cameron were ordered to pay a former client $723,000 for losses sustained from investing in MLPs. The claims included overconcentration in unsuitable investments (MLPs), negligence, and failure to supervise. Cameron was registered with the RBC Massachusetts office.

Silver Law Group is investigating Texas-based broker M F “Mickey” Long II (“Long”) (CRD# 1778299) of VSR Financial.  According to the Financial Industry Regulatory Authority’s (“FINRA”) BrokerCheck records, Long has been subject to nine customer complaints.

One of the nine customer complaints is currently pending and alleges unsuitable investment recommendations, misrepresentations, and breach of fiduciary duties among others.  The claims appear to relate to oil and gas private placements.

Oil and gas securities were at their peak when the commodity was soaring at unprecedented levels in 2008.  The prices rallied to a high of just over $110 per unit in 2011, but the commodity was risky.  Another drop occurred in late 2014 and the commodity has currently been valued around $50 per barrel but going as low as the high 20s.

Silver Law Group is investigating VSR Financial Services (“VSR”) broker Dennis Van Patter (“Patter”) (CRD# 1364583) for allegations that he unsuitably recommended oil and gas investments to his customers.

According to Patter’s Financial Industry Regulatory Authority (“FINRA”) BrokerCheck report, Patter has nine misconduct disclosures on his record. Five of the complaints have settled, and one is a FINRA sanction that suspended Patter for 45 days.

According to the report, FINRA sanctioned Patter after the broker recommended that a retired customer invest in alternative investments unsuitable in light of the customer’s investment objectives and risk tolerance and heavily concentrated the customer’s assets in said investments.  Overall, Patter invested $1.6 million of the customer’s money in various alternative investments, all of which were described as highly speculative or very risky, including notoriously volatile oil and gas drilling partnerships, non-traded real estate investment trusts (“REITs”) and private placements.

Silver Law Group is investigating former South Florida-based RBC Capital Markets (“RBC”) broker Lisa J. Lowi (CRD# 1347790) for amassing 23 customer complaints since early 2015, many of which deal with energy-related investments.

According to Lowi’s Financial Industry Regulatory Authority (“FINRA”) BrokerCheck report, 23 customer complaints have been reported against Lowi since February 2015, of which 14 are related to investments in the energy sector.  The remaining complaints do not indicate the particular investment, so more complaints could potentially concern energy sector investments.

The complaints allege millions of dollars in investor losses and damages, and five have already settled.  The remaining complaints are pending, and one has been withdrawn according to FINRA records.

Silver Law Group is investigating claims related to Paul Vincent Blum (CRD # 735003), a West Palm Beach, Florida, broker who was registered with RBC Capital Markets, LLC, from October 2008 until his termination in October 2015. RBC terminated Blum’s registration with the firm, putting his reason for discharge as due to “loss of confidence.” Silver Law Group recently was retained to file a FINRA arbitration claim on behalf of one of Blum’s former clients, who alleges that he has experienced significant investment losses stemming from Blum’s unsuitable recommendation to make concentrated investments in oil and gas.

We are currently investigating multiple claims against brokerage firms and stockbrokers for improperly recommending the unsuitable sale of energy stocks, bonds and MLPs frequently in large or overconcentrated positions. Some of the companies include:

  • Linn Energy

Silver Law Group represents investors in securities and investment fraud cases and has been retained to represent investors who have suffered losses in the energy markets, including investors who were solicited to purchase investments in oil, gas and energy, stocks, bonds, Master Limited Partnerships (“MLPs”) and funds. Many energy investments have collapsed in value in the past year leaving investors with substantial losses in concentrated positions of speculative investments.  Silver Law Group has been retained to represent investors who were sold unsuitable investments or were misled by their financial advisors or stockbrokers into believing that oil and gas investments were safe for their retirement income. In many cases, financial advisors solicited clients to purchase “overconcentrated” positions in oil and gas stocks promising that these investments offered a high yield with limited risk.

Many retired investors and those seeking income were sold oil and gas energy MLPs, bonds, stocks and funds which may not be suitable for conservative or moderate risk investors. These investments may have violated the suitability rule imposed by the Financial Regulatory Authority, which prohibits unsuitable sales of investments to customers.

Some of the companies that are in the oil, gas or energy sector which we are investigating are:

Alerian MLP ETF
Alpha Natural Resources
Anadarko Petroleum
Atlas Pipeline Partners LP
BreitBurn Energy Partners LP
Buckeye Partners
Cheniere Energy Partners
Chesapeake Energy
Credit Suisse X-Links Cushing MLP Infrastructure
DCP Midstream Partners
Diamond Offshore
Enbridge Energy Partners LP
Encore Energy Partners
Energy Product Partners
Energy Transfer Partners
EV Energy Partners
First Trust North American Energy
JP Morgan Alerian MLP Index ETN
Kinder Morgan Energy Partners
Legacy Reserves LP
Linn Energy
Magellan Midstream Partners
Marathon Oil
MarkWest Energy Partners
MarkWest Energy Partners LP
NGL Energy Partners
Noble Energy
NuStar Energy LP
ONEOK Partners
ONEOK Partners LP
Pengrowth Energy Trust
Penn West
Plains All American Pipeline
Regency Energy Partners
Sunoco Logistics Partners
Transamerica MLP Fund
UBS Alerian MLP
Valero Energy
Vanguard Natural Resources
Williams Partners
Yorkville High Income MLP

If you have been the victim of investment fraud or have been misled by a financial professional trusted with an investment of yours, you might have the grounds upon which to assert a claim to recover your losses through FINRA arbitration or the courts. Silver Law Group is a nationally-recognized securities law firm representing investors worldwide with their claims for losses due to stockbroker misconduct. Our attorneys have Martindale-Hubbell® Peer Review Ratings™ of “AV” Preeminent for achieving the highest ethical and legal standards and Scott Silver is admitted to practice in New York and Florida.  The firm has successfully recovered multi-million dollar awards for its clients through securities arbitration and the courts.  To contact Scott L. Silver to discuss your legal matter, call toll-free (800) 975-4345 or e-mail him at SSilver@silverlaw.com

Chestnut Exploration and Mark Plummer Facing Allegations of Securities Fraud With Oil & Gas Securities on silverlaw.com

Claims of omission, misrepresentation and wrongful use of client funds follow alleged losses totaling over $5M

Chestnut Exploration Partners and broker Mark A. Plummer were recently named in a FINRA disciplinary action that alleges omissions and material misrepresentations were made in the sale of private placement securities contracts to 88 customers, who allege that they lost over $5,000,000 after investing in the 4×4 Securities, representing an average 90 percent loss on those investments. According to the claim, Chestnut Exploration Partners and Plummer allegedly misused at least $567,000 that were put up by investors for completion and drilling costs.

Plummer spent 11 years working in the securities industry and was registered with Chestnut Exploration, which was previously known as Chestnut Energy Partners, from 2003 to 2014. Mr. Plummer is also currently the subject of two customer complaints.

As discussed in last week’s Silver Law Group blog, Cobalt International and Seadrill Limited, two oil and gas publicly traded companies, are now defendants in class action lawsuits.  The separate, but similar, suits allege that investors lost significant sums of money by relying on misleading information and SEC filings from each company.

Investigation Reveals Possibility of Inappropriate Investment Advice

It is believed that unsuitable and inappropriate advice from stock brokers and financial representatives who recommended the purchase of these companies contributed to losses suffered by investors. The Silver Law Group is currently investigating the role that the Morgan Stanley’s registered financial representatives may have played in investors’ losses.

The recent and sharp decline of oil prices has been the source of joy for consumers at the gas pump.  Unfortunately, many investors have been experiencing the opposite emotions as the price of many oil and gas related stocks have plummeted.  Two of these companies are Cobalt International Energy, Inc. and Seadrill Limited. Cobalt is an international oil exploration company that has seen its stock price drop by well-over 50% since this time last year.  Similarly, Seadrill is a separate offshore drilling company that has similarly seen its share prices fall by 72% in the past six months. Seadrill shareholders also saw their dividends suspended.

Losses Rooted in Violations?

The losses suffered by investors in Cobalt and Seadrill were exacerbated by alleged violations of misconduct and SEC violations by both entities.  Among other misconduct, Cobalt has been accused of making false and misleading statements to investors, issuing equally false press releases, and filing misleading filings with the SEC.  A number of the allegation center around statements by Cobalt regarding its access to Angolan wells and related unethical business practices.

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