Our law firms work hard to investigate instances of potential fraud, unsuitable investment recommendations, and sales practice violations committed by brokers and financial advisors that adversely impact our clients. Our mission is to help our clients recover their investment losses when they have been taken advantage of by unscrupulous brokers and advisers. One of our current investigations involves recommendations made by Morgan Stanley representatives of Cobalt International Energy and Seadrill Ltd.
Cobalt International Energy and Seadrill Ltd.
Cobalt International Energy and Seadrill Ltd. are oil and gas exploration and production companies, that were aggressively solicited by certain Morgan Stanley advisors in 2014. In these cases, Morgan Stanley representatives consistently promoted and encouraged the purchase of shares of these companies, which prompted some clients to change the composition of their investment portfolios so that a quarter or more of their portfolios’ cumulative value were invested in these two oil and gas exploration and production companies, if not other oil and gas investments.
Unfortunately for the Morgan Stanley customers that invested in Cobalt International Energy and Seadrill Ltd., the value of these companies has plummeted over the last year. Cobalt International Energy’s stock value has been reduced by half in the past year and Seadrill Ltd.’s stock value has fallen to just one fourth of what it was a year ago.
This has caused some Morgan Stanley customers to suffer substantial monetary losses due to the misguided, and potentially negligent recommendations made by Morgan Stanley representatives about investing heavily in these two companies. As such, Morgan Stanley clients who lost a substantial amount due to the representatives’ recommendations may have a cause of action against Morgan Stanley. Legal claims that could enable investors to recover their investment losses related to Cobalt International Energy and Seadrill Ltd. may include:
- Claims of over-concentration. Over-concentration occurs when a substantial, disproportioned amount of an investor’s portfolio is invested in just one or two companies, or in a particular economic section, upon the broker’s recommendation. Examples of over-concentration include a portfolio that predominantly comprises stock from a single company or a single industry. If company takes a hit, or the industry becomes unstable, the investor can lose a significant portion of his or her portfolio value.
- Claims of unsuitability. When registered brokers make investment recommendations, those recommendations are required by law to be suitable and appropriate in light of the customer’s investment strategy, timeline, investment goals, and risk tolerance. Brokers and advisers are supposed to adhere to the rule of “know-your-customer” and when the brokers and advisers make recommendations that go against the interests of their clients, the recommendation is unsuitable and inappropriate.
Our law firms are representing Morgan Stanley customers who have suffered losses attributable to the recommendations made by Morgan Stanley representatives. We are working with these clients to assert claims of unsuitability and over-concentration in an effort to recover their investment losses.
For more information about this investigation involving Cobalt International Energy and Seadrill Ltd., please contact us. Initial consultations are free of charge and we usually work on a contingency fee basis.