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Our law firms continue to investigate former The Villages, Florida-based Morgan Stanley broker Andrew T. Yocum (CRD# 4590723)  for over 36 BrokerCheck disclosures, most of which relate to the unsuitable recommendation and/or overconcentration of risky oil and gas investments.

Andrew T. Yocum’s FINRA BrokerCheck Report

Our attorneys have previously been investigating Andrew T. Yocum.

Our law firms continue our investigation into David B. White (CRD# 1382131) and his business David B. White Financial, Inc.  White and David B. White Financial operate under Centaurus Financial, Inc.

Another Customer Files a FINRA Arbitration Against David B. White

Our oil and gas securities attorneys have recently written and been monitoring White and David B. White Financial. Another customer has filed a securities arbitration complaint against White. According to White’s most recent complaint, filed in June 2017, the customer alleges that White sold unsuitable investments and also rushed them into signing a settlement. Now, according to the complaint, the customer believes the settlement was not in their best interest.

FINRA issued an award in the arbitration between claimants Joseph R. Ritz, Susan F. Ritz and respondents Morgan Stanley Smith Barney LLC (#CRD 149777) and Charles Alan Correal (CRD# 1366202).

According to the award documentation, the claimants asserted claims for breach of fiduciary duty, violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, suitability, professional negligence, breach of contract and breach of the duty of good faith and fair dealing, failure to supervise  and vicarious liability by Morgan Stanley Smith Barney and Charles Alan Correal.

The claimants allege that respondents invested their funds in risky and unsuitable energy stocks, including Seadrill, Ltd., Copano Energy LLC, and Interoil.

Our attorneys are investigating former Maryland-based RBC Capital Markets, LLC (CRD# 31194) broker John S. Simpson (CRD# 719367) after multiple complaints alleging securities violations concerning the energy, oil and gas sector were settled.

According to Simpson’s FINRA BrokerCheck report, FINRA barred Simpson in December 2016 after he failed to respond to a FINRA inquiry.  The inquiry and bar follow a string of settlements and a discharge from RBC Capital Markets.

RBC Capital Markets discharged Simpson in January 2016 after Simpson allegedly made discretionary transactions in client accounts.  Following RBC Capital Markets’ discharge, five (5) FINRA arbitration complaints were settled against Simpson.  Most of the settlements alleged unauthorized trading.

Rising oil prices apparently are not enough to save the once-promising master limited partnership (“MLP”) Seadrill Limited.  Seadrill stock plummeted, going down 54% on April 4, 2017 as the company announced that it will likely file for bankruptcy.

The most ominous news from Seadrill was its warning to investors of its substantial debt load and its expectation that shareholders are “likely to receive minimal recovery for their existing shares.”

Seadrill, as many oil and gas companies, has seen its value drop dramatically over the last three (3) years.  But the company was once highly-valued by Wall Street, with a market capitalization of $23.7 billion as recently as 2013.  Today, the company has dropped approximately 98% in value and sits at a market capitalization of just under $400 million.

A FINRA arbitration panel held Wunderlich Securities (CRD# 2543) and Ralph E. DeRose (CRD# 721488) liable for over $1 million in damages to a customer alleging securities misconduct related to energy investments on April 25, 2017.

According to the Award, Wunderlich’s and DeRose’s customers alleged that DeRose failed to sell holdings in their accounts at their request and overconcentrated their accounts in unspecified energy holdings.

DeRose is based out of Wunderlich’s Beachwood, Ohio branch.  Wunderlich has employed DeRose since October 2010.

With the oil and gas industry and Wall Street, public sentiment changes quickly.  After over 100 oil- and gas-related companies declared bankruptcy over the past two years, financial analysts are jumping back on the bandwagons of some of the companies emerging from bankruptcy.

A recent Barron’s article profiles six of these oil and gas companies that have come out of bankruptcy since last summer as value purchases.  These companies are Linn Energy, Ultra Petroleum, SandRidge Energy, Halcon Resources, Midstates Petroleum and Goodrich Petroleum.

Barron’s was a consistent critic of the old Linn Energy.  Now, Barron’s says the post-bankruptcy Linn Energy is much different and aims to be a growth-oriented exploration and production company rather than a yield play.  Similarly, an analyst in the report states you can buy the SandRidge stock for less than the value of its proven reserves.  However, prior shareholders received little or nothing in these new companies.

Our attorneys are investigating potential legal claims against Las Cruces, New Mexico-based Wells Fargo Clearing Services, LLC (CRD# 19616) broker Jeffrey R. Wilson (CRD# 1161819) concerning allegations that Wilson unsuitably recommended Wells Fargo customers to invest in oil, gas and energy investments.

Wilson’s FINRA BrokerCheck report reflects three customer complaints, all of which involve allegations of unsuitable investments.

In a customer complaint to Wells Fargo concerning Wilson, the investor alleged unsuitable energy and other investments.  Wells Fargo paid $250,000.00 to resolve the complaint.

Our attorneys have reported in the past on the Haynes and Boone, LLP Oil Patch Bankruptcy Monitor (the “Bankruptcy Monitor”), a report that monitors the North American oil and gas company bankruptcies.  The Bankruptcy Monitor is updated periodically, with its most recent update coming in February 2017 and lists the total North American oil and gas companies that have filed bankruptcy at 114 since January 2015.

According to the Bankruptcy Monitor, the total amount of debt for the aggregate of the oil and gas companies’ bankruptcies is over $74 billion. Some of these companies were heavily recommended by Wall Street’s biggest investment banks such as Raymond James & Associates (CRD# 705), Citigroup Global Markets (CRD# 7059), Credit Suisse Securities (CRD# 816), Merrill Lynch (CRD# 7691), Wells Fargo Securities (CRD# 126292), and Morgan Stanley (CRD# 149777).

Notable oil and gas companies listed in the report that may have been recommended by the aforementioned firms are Linn Energy; Breitburn Energy; Sandridge Energy, Atlas Resource Partners, Swift Energy, and Memorial Production Partners.

According to PLS, Inc., a Houston-based oil and gas research firm, the oil and gas industry raised quite a bit of money in 2016 despite featuring almost 115 bankruptcies over the last two (2) years.

PLS compiled data reviewing the capital markets activity for 2016 according to a news release.  Some of the more notable figures included the $186 billion the oil and gas industry raised through U.S. public offerings across 346 bond and equity deals.  The $186 billion raised was actually $10 billion less than what was raised in 2015, according to PLS.

According to PLS, banks obtained an aggregate of $2.3 billion in fees on the money raised in 2016.  PLS also listed the top-10 banks for U.S. energy equity deals in 2016.  Among others, notable inclusions in that list were Morgan Stanley, Barclays, Credit Suisse, RBC Capital Markets, Citigroup, and Wells Fargo.

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