Oil & Gas FINRA Arbitration Attorneys

FINRA Arbitration Attorneys Experienced in Claims Involving Oil and Gas Investments

FINRA operates the largest securities dispute resolution forum in the country. At Silver Law Group, our oil and gas FINRA arbitration lawyers have substantial experience representing clients in FINRA arbitration proceedings related to oil and gas losses. Oil and gas securities are high-risk and volatile investments. Unfortunately, improper recommendations of oil and gas stocks may be made to elderly investors and others searching for safe and conservative investments. When risk avoidance is a great concern, oil and gas bonds and master limited partnerships (MLPs) should not be recommended. It is irresponsible for a broker or a brokerage firm to claim that these are safe or low-risk investments.

If you were inappropriately advised to invest in oil and gas bonds, MLPs, or stocks, and you suffered losses, there may be a number of different grounds for a claim. These may include unsuitability, misrepresentation, overconcentration, churning, breach of fiduciary duty, and negligence. We can tenaciously advocate for you in an effort to recover your losses.


One type of securities claim that is often brought against brokerage firms and stockbrokers in connection with oil and gas investments is unsuitability. Under FINRA Rule 2111, members and associated persons must have reasonable grounds to believe that a recommended transaction or investment strategy involving a security is suitable for an investor, based on information gleaned with the use of reasonable diligence to determine the investor's investment profile. The investment profile should include information about the investor's age, other investments, financial condition, tax status, investment goals, risk tolerance, investment experience, and investment timeline.

Brokers need to consider these factors when making recommendations about securities. When a broker recommends an oil and gas investment that does not fit with an investor's level of risk tolerance, financial condition, and objectives, the investor may be able to hold the broker liable. In order to establish unsuitability, your oil and gas FINRA arbitration lawyer would need to show that there was a transaction, there was a loss of money, and the broker knew that you needed a low-risk investment.


When oil and gas investments are sold by a brokerage firm licensed by FINRA and the SEC, the brokerage firm is subject to strict laws and rules regarding the representations that must be made in connection with them. Often, a misrepresentation occurs in connection with risky or volatile securities in order to conceal negative information about the securities. Brokers are not supposed to intentionally or fraudulently omit material facts or misrepresent material facts related to securities. You may be able to bring a claim before FINRA arbitration if you suffer losses because a broker failed to perform due diligence about a security offering, failed to disclose material facts, failed to disclose the costs related to a security, or gave you unrealistic assumptions in connection with investment projections. Rule 10b-5 requires a showing that there was an omission or misrepresentation in connection with the purchase of a security, reliance, and damages due to the misrepresentation.


It is unwise to put too much of your account into one type of investment. If you asked for a safe investment, but your stockbroker invested much of your account into oil and gas, and you suffer losses, you may have a claim for overconcentration. Stockbrokers are not supposed to make recommendations and purchases that do not fit your risk profile. A failure to diversify assets while placing substantial amounts of assets in a highly risky security may violate the doctrine of suitability. The results of overconcentration can be financially disastrous for an investor because if oil and gas stocks plummet, there may be huge losses.


Churning exists when a broker trades excessively to generate commissions, rather than for a useful purpose. Under FINRA Rule 2110, your broker is supposed to observe high standards of commercial honor and just and equitable principles of trade. When recommending securities, NASD Rule 2310(a) requires a broker to have reasonable grounds for believing that a recommendation is suitable for a customer, based on the customer's financial needs and situation. The obligation of quantitative suitability emphasizes whether the number of transactions within a timeframe are suitable, based on the customer's financial circumstances and investment goals. In order to establish a churning claim related to oil and gas securities, your oil and gas FINRA arbitration attorney will need to prove that a broker controlled your account, and they made excessive purchases and sales of oil and gas securities only to generate commissions.

Breach of Fiduciary Duty

Breach of fiduciary duty is the most common FINRA claim. Any financial professional who owes you a fiduciary duty owes you the highest duty of care and loyalty. When acting as a fiduciary, a financial professional has greater obligations to a client, and these obligations require the financial professional to act faithfully and diligently to support the client's best interests. Fiduciary relationships exist if one person owes a duty to act for or give advice for the benefit of another person upon matters within the scope of the relationship. Registered investment advisers are fiduciaries. Moreover, if a financial adviser touts their own financial expertise to get a client's business, and the client relies on those representations, a fiduciary relationship may have been created. Stockbrokers without a fiduciary duty do not have a duty to put a client's interests above their own. If their behavior causes losses, your oil and gas FINRA arbitration lawyer would need to look at whether they made suitable recommendations.


Brokers may be held responsible for negligence if they do not abide by the duty of suitability, which is not as strong a duty as a fiduciary duty. When the duty owed is a fiduciary duty, an investment adviser is supposed to place a client's interests before their own. This is not the case when only a duty of suitability is owed. In order to establish negligence, you will need to show a duty, a breach of duty, causation, and damages. You will need to show that the broker owed a duty of suitability and breached the duty and that the breach caused you financial losses. We will look at whether the broker performed due diligence on a potential oil and gas investment to make sure that it is what it purports to be. We will also look at whether the portfolio was appropriately diversified.

Brokerage Firm Liability

Brokerage firms are supposed to adequately supervise and manage their brokers to make sure that they are following securities laws and FINRA rules. Generally, the firm will need to establish that it had put in place a system to make sure that its employees were complying with rules and procedures. A brokerage firm that fails to abide by this duty and inadequately supervises brokers may expose a brokerage firm to liability for an employee broker's negligence. Under the doctrine of respondeat superior, an employer can be held accountable for an employee's negligence in the course and scope of employment. For example, if a broker is involved with churning and due diligence failures, a brokerage firm might be liable for the financial losses incurred.

Consult an Experienced Oil and Gas FINRA Arbitration Attorney

Private offerings of oil and gas are especially risky for investors. If a brokerage firm or stockbroker recommended an unsuitable private offering, you may have a claim for damages. Our firm has a proven track record of success in representing investors in claims against stockbrokers, brokerage firms, and investment advisers before FINRA and in state and federal courts for oil and gas securities violations. We represent retirees and other investors nationwide. Call us at (800) 975-4345 or complete our online form.

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