Oil and gas investments, whether private oil and gas partnerships or stock offerings, are inherently risky due to the speculative nature of oil and gas exploration and drilling. Investors face the additional risks associated with investing in private companies such as decreased regulatory scrutiny and lack or transparency, including limited information about the issuer and management, and limited financial reporting.
Nevertheless, financial advisors continue to recommend risky oil and gas investments to investors at the investors’ peril. Financial advisors are required to recommend suitable investments and investment strategies to their clients (known as the suitability rule). As part of this duty, financial advisors are required to have an adequate and reasonable basis for their recommendations based upon a reasonable investigation and appropriate due diligence. Financial advisors face the risk of lawsuits and civil liability where they recommend risky oil and gas investments to investors who cannot withstand the risk associated with these investments or for whom these investments do not match the investor’s investment objectives.
Lufrano Law, LLC is currently investigating the sales practices of several financial advisors who may have recommended risky investments in Cal Dive, Quicksilver Resources, Inc. and BPZ Resources. If you lost money either investing in the aforementioned oil and gas companies through a financial advisor, you may be able to recover your losses through FINRA arbitration. Lufrano Law, LLC is a national securities litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. Our firm only receives a fee if you recover money. Please contact one of our attorneys at (800) 627-2179 to schedule a free consultation.