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.
The price of oil dropped dramatically from 2014 to 2016, causing many oil and gas companies to file for bankruptcy protection. Many of these oil and gas companies have left investors behind as the companies emerge from bankruptcy clean, with new investors, billions of dollars raised to continue their operations.
Many of the listed banks underwrote oil and gas companies that are now in bankruptcy. Once a bank creates this debt, it frequently sells corporate debt to retail investors.
Before a brokerage firm and a broker can recommend a particular investment, they have to first ensure that it is suitable based on customer’s risk profile. This includes a variety of factors including age, net worth, etc.
In many cases, brokers and brokerage firms unsuitably recommended oil and gas investments to their customers. Brokers would tout the oil and gas investments as safe and sources of steady income. Sometimes those oil and gas investments were underwritten by the selling brokerage firm, such Raymond James and Linn Energy and Morgan Stanley and Seadrill. Investment banks make money on multiple parts of the transaction.
Additionally, some brokerage firms and brokers overconcentrated their customers in oil and gas investments.
FINRA arbitration is a fast, efficient way to recover your lost oil and gas investment funds. It provides a medium to recover for investors who were told to invest and may have been left with nothing following an oil and gas company’s bankruptcy. We work on a contingency fee basis, meaning you pay us nothing unless we win and recover money for you.
Our lawyers are experienced in recovering investor losses due to broker and brokerage firm misconduct through FINRA arbitration.
For more information about the law firms, the lawyers, and our oil and gas investment practice area, please visit our website at www.oilgasfinraarbitration.com. Contact Scott L. Silver at (800) 975-4345 for a free, confidential consultation.