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In April 2016, Peabody Energy Corp. (“Peabody”), a one-time Wall Street darling based in St. Louis, Missouri filed for Chapter 11 Bankruptcy protection.  Almost a year to the day, Peabody emerged from bankruptcy on Monday, April 3, 2017.  A day later, another one-time Wall Street darling, Seadrill (ticker “SDRL”), a deepwater drilling contractor that provides drilling services to the oil and gas industry, declined 54% following its warning to investors that the Bermuda-based company is likely to seek bankruptcy protection (or the equivalent) in the United States or United Kingdom (company headquarters).

Seadrill is just another corporate casualty among the hundreds of oil, gas, coal and energy companies that filed and sought bankruptcy production since early 2015.  The Securities Arbitration and Investment Litigation Lawyers at the Silver Law Group, The Law Office of David Chase, P.A. and Ciklin Lubitz & O’Connell (www.oilgasfinraarbitration.com) are currently investigating cases relating to investments in Peabody and Seadrill, as well as many other similarly-fated oil, gas, coal and energy producing companies, such as Alpha Natural Resources, Arch Coal and Linn Energy – which have all filed for bankruptcy.

Like many other energy companies, Seadrill is likely to follow a familiar “play book”:  seek Ch. 11 bankruptcy protection, negotiate golden parachutes for its executive team, renegotiate debt and credit, emerge from bankruptcy, and leave numerous investors with little or nothing to show for their principal invested.

Our attorneys are investigating former Morgan Stanley (CRD# 149777) broker Andrew Yocum (“Yocum”) for numerous investor claims of unsuitable and overconcentrated investments in oil- and gas- related investments.

Yocum (CRD# 4590723) has had a total of 35 disclosures on his FINRA BrokerCheck report, all of them reported within the last year and all but one pertaining to unsuitable and overconcentrated investments in oil- and gas-related securities.  The outlier is an employment termination by Morgan Stanley due to allegations of unauthorized trading.

Yocum operated out of the Morgan Stanley offices in The Villages, Florida, a planned, age-restricted community primarily populated by retired individuals.

Our attorneys are investigating Philadelphia, Pennsylvania-based Morgan Stanley (CRD# 149777) broker Joseph P. McGinley (CRD# 327656) after a FINRA arbitration claim alleging multiple securities violations involving LinnCo. Energy and Sandridge Energy settled.

According to McGinley’s FINRA BrokerCheck report, the claim settled in September 2015 and involved McGinley’s investment activities from April 2012 to May 2015.

Morgan Stanley has employed McGinley since April 2011 at its Philadelphia, Pennsylvania branch.

Linn Energy exited its chapter 11 bankruptcy leaving many shareholders with nothing but a worthless piece of paper.

Linn Energy is an oil and gas master limited partnership (“MLP”) founded in 2003.  The company went public just three (3) years later in 2006, raising approximately $261 million.

Linn Energy was once the darling of the oil and gas industry, reaching peaks of $40 per share in late 2012.  The company went on an acquisition spree, including Berry Petroleum for $4.3 billion at the height of the oil boom in 2013.  Unfortunately, the oil boom didn’t last, and the debt Linn Energy took on was too large to support when the price of oil began to plunge in June 2014.

A FINRA arbitration panel ordered Raymond James Financial Services, Inc. (CRD# 6694), Inc. to pay back its customer for investments losses in Linn Energy LLC in March 2017.

The claimant in the FINRA arbitration alleged the investment in Linn Energy was unsuitable and, among other claims, Raymond James failed to supervise its broker, John S. MacGowan (CRD# 315901).

MacGowan is based out of Raymond James’ New York, New York branch and has been employed by Raymond James since 1999.

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

Las Cruces, New Mexico Broker Jeff Wilson

According to Wilson’s FINRA BrokerCheck report, Jeff Wilson has three (3) disclosures, all of which feature aggrieved investors recovering some of their investment losses.

A retired investor recovered over $20,000 in February 2017 in a FINRA arbitration involving the sale of Breitburn Energy Partners LP (“Breitburn”).

According to the FINRA award, the retiree alleged unsuitability, failure to supervise and breach of fiduciary duty among other claims.  The award was against Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD# 7691).

Breitburn is a publicly-traded, independent oil and gas master limited partnership (“MLP”).  Breitburn filed chapter 11 bankruptcy in May 2016 due to low oil prices.  Breitburn is one of many oil and gas companies that have declared bankruptcy in the last two years.

Peabody Energy (OTCPK: BTUUQ) announced on January 26, 2016 that the U.S. Bankruptcy Court for the Eastern District of Missouri approved the company’s reorganization plan, disclosure statement, private placement agreement and backstop agreement.

The bankruptcy court’s approval will allow Peabody to begin soliciting votes from its creditors on the proposed plan of reorganization ahead of March deadline and hearing to confirm the plan.

The bankruptcy court’s approval is another step closer to the final blow for shareholders, who, according to some analysts, probably will end up with cancelled shares and no equity in the reorganized Peabody Energy.  Shareholders have been fighting to get a piece of the reorganized company, even attempting to create an official committee to assist in crafting the reorganization plan.  The bankruptcy court judge denied that request earlier this month.

Our attorneys are investigating losses in Energy XXI Ltd. Bermuda (stock ticker “EXXI”).

According to its website, EXXI is an independent oil and natural gas development and production company that focuses on developing drilling on properties it owns.

EXXI is currently trading at $0.02 per share on the OTC Markets.  The stock reached a peak of close $40 per share at certain points over the past five years, but has dramatically fallen in value with the volatility of oil prices in the past two years.  EXXI lost over 95% of its value in less than a year.

Linn Energy, LLC (LINE) filed for bankruptcy protection in May 2016.  U.S. Bankruptcy Judge David Jones issued an Order today confirming LINE’s chapter 11 bankruptcy restructuring plan.  Our attorneys have previously written on the subject of LINE and continue to update accordingly.

It is believed that under the bankruptcy plan, LINE will be able to shed approximately $4.3 billion of the $6 billion debt it claimed in its May 2016 bankruptcy filing.  The remaining $1.2 billion in debt will be absorbed by Berry Petroleum Co. LLC, a company LINE acquired in 2013, which will now become a separate entity.

Both LINE and Berry Petroleum are expected to emerge from bankruptcy and business will continue as usual, leaving many investors in a lurch and in many respects “holding the bag.”  The Securities Arbitration and Investment Litigation Lawyers at the Silver Law Group, The Law Office of David Chase, LLC and Ciklin Lubitz & O’Connell (www.oilgasfinraarbitration.com) continue to investigate and have matters pending against firms/broker that underwrote, sold and recommended LINE to investor customers.

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