Oil & Gas FINRA Arbitration Attorneys

Representing Investors Nationwide

Brokerage firms and individual brokers often recommend oil and gas stocks, bonds, and master limited partnerships (MLPs) to people who are looking for conservative investments or income streams such as the elderly. Brokers sometimes have irresponsibly claimed that these are low-risk investments that are "must-haves" for retirees and people approaching retirement. To the contrary, the nature of gas and oil prices has been historically volatile and these investments are extremely risky. Relying on the advice of professionals, conservative investors are often solicited to invest a large percentage of their portfolios to oil and gas stocks, further increasing the risk of significant losses. Our knowledgeable oil & gas FINRA arbitration lawyers are committed to helping investors who sought a conservative investment but were improperly steered by stockbroker misconduct toward stocks, bonds, or MLPs in this unpredictable industry. If you were improperly advised or defrauded, you may be able to recoup your losses.

Holding Stockbrokers and Brokerage Firms Accountable for Misconduct

Investors are generally required to pursue disputes through securities arbitration operated by the Financial Industry Regulatory Authority (FINRA). FINRA is a quasi-governmental agency that works to make sure investors are treated fairly by investigating firms, monitoring securities advertisements, writing regulations, and providing educational materials.

FINRA requires securities professionals to provide full disclosures of all of the material facts related to the products they are selling before an investor buys them. Brokers must be licensed and registered with FINRA to conduct securities transactions. If you believe you have been a victim of broker misconduct or fraud, you can bring your dispute to binding arbitration before a FINRA panel.

Common forms of broker misconduct include churning, unsuitability, failure to diversify, overconcentration or unauthorized trading. In a churning claim, for example, you would argue that a broker bought and sold securities with the purpose of generating commissions, not keeping in mind your investment objectives. You would seek to show that the broker controlled the account, the trading was excessive, your investment objectives were incompatible with oil and gas securities or the broker intended to defraud you or acted recklessly or willfully.

An unsuitability claim may be appropriate when a broker recommends investments that are inappropriate for your investment goals and objectives, or your age. These claims hinge on whether an investment was made within reasonable guidelines for the client.

An action based on a failure to diversify is somewhat similar to an unsuitability claim. The issue is whether focusing heavily on a particular type of investment was suitable for the investor, given his or her objectives and risk tolerance.

Enforcing Your Rights under Securities Laws

If you buy an oil and gas interest, you may also have a remedy under securities laws if the securities that you bought was not properly registered, or if you were the victim of a misrepresentation or omission. With regard to an interest that was not registered, you can try to seek rescission. You would need to prove that the investment was a security and that it was not registered or exempt from being registered.

Statutory fraud claims can be asserted under the federal or state securities laws including the Florida Securities and Investor Protection ACT, Fl. Stat. §517. Under the federal securities laws, including Rule 10b-5, it is unlawful for someone to directly or indirectly employ a device, scheme, or artifice to defraud an investor, to make untrue statements of material fact or leave out material facts necessary to not mislead, or to engage in any action that operates as a fraud or deceit upon someone else in connection with the purchase or sale of a security.

With a Rule 10b-5 claim, you need to prove a misrepresentation or omission of a material fact in connection with the purchase or sale of a security, your reliance, causation, damages, and scienter (fraudulent conduct). For example, misrepresentations may be made about the purposes for which the invested funds will be used, such as broker fees, the investment risks, compensation for the promoter, operating expenses for an unrelated business, or the use of funds for personal items.

Often, arbitration panels will consider a customer's sophistication to determine whether he or she was misled. Your credibility and that of the broker will be important to the process. In some states, there may be more accessible remedies for securities fraud under state laws. Common law claims that may also be appropriate, depending on the state, include negligence and breach of fiduciary duty.

Consult an Oil & Gas FINRA Arbitration Lawyer

Investing in private offerings of oil and gas carries particularly high risks and many brokerage firms and stockbrokers have been held accountable for unsuitable recommendations. We have a proven track record of success representing investors in claims against stockbrokers, brokerage firms and investment advisors before FINRA and in state and federal courts for violations of securities laws. Our oil & gas FINRA arbitration attorneys represent retirees and other investors nationwide. Contact us at (800) 975-4345 or through our online form to schedule a free consultation.

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