The White Law Group is investigating potential claims against the broker dealers that sold high risk oil and gas investments, such as Reef 2012-A Private Drilling Fund, onto unsuspecting investors.
According to its website, Reef Oil & Gas strives to develop, exploit, and produce oil and natural gas properties and operate wells drilled. The company is currently based in Richardson, Texas and has offered numerous public and private partnerships over the years.
Many oil and gas LPs have high expense ratios, and due to the decline in the overall health of the oil and gas market, are suffering. Some are on the brink of default, or worse yet, bankruptcy. Such an outcome is extreme, but not unforeseen. It only highlights the unsuitability of these investments for most retail investors – particularly in large concentrations.
Are High Risk Oil and Gas Private Placements Suitable for you?
The problem with private placement investments such as Reef 2012-A Private Drilling Fund LP is that they involve a high degree of risk. They are typically sold as unregistered securities which lack the same regulatory oversight as more traditional investment products like stocks or bonds. These investments may seem wise at first, until the dramatic drop in distributions.
Broker dealers are required to perform adequate due diligence on all investment recommendations. They must ensure that each investment recommendation that is made is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.
Another problem with Reg D private placements is that they typically come with high sales commissions and due diligence fees. These high commissions and fees can provide brokers with an enormous incentive to push the product to unsuspecting investors who do not fully understand the risks. They may misrepresent the basic features of the products – usually focusing on the income potential and tax benefits while downplaying the risks.
If a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be found liable for investment losses in a FINRA arbitration claim. FINRA provides an arbitration forum for investors to resolve such disputes.
You may be able to recover investment losses from your purchase of Reef 2012-A Private Drilling Fund LP. For a free consultation with a securities attorney, please contact The White Law Group at 1-888-637-5510.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida. The firm represents investors throughout the country in claims against their brokerage firm.
For more information on the firm and its representation of investors, visit www.WhiteSecuritiesLaw.com.