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.
Morgan Stanley & Co. LLC (CRD# 8209) was an underwriter for Linn Energy’s most recent public offering in May 2015, after oil had already fallen significantly from a peak the year before. As part of the Linn Energy offering, Morgan Stanley agreed to purchase over 1.7 million Linn Energy units, and had the option to purchase more.
Linn Energy filed for chapter 11 bankruptcy in May 2016, the largest master limited partnership (“MLP”) bankruptcy ever at with $8.3 billion in debt. In late February 2017, Linn Energy emerged from bankruptcy as two separate private companies. Shareholders were left with almost nothing.
Morgan Stanley has been tied to multiple companies in the oil and gas sector. Notably, it served as an underwriter to at least one public offering for Alpha Natural Resources, Seadrill Limited, Breitburn Energy Partners LP, and Arch Coal, Inc. in addition to the aforementioned Linn Energy offering.
MLPs have been extremely popular for the past six or seven years. MLPs are a type of business organization that operates as a publicly-traded limited partnership and are most common in the energy, oil and gas industry. MLPs are conducive to producing regular income, allowing MLPs to offer attractive income yields that are often based on long-term service contracts.
Because an MLP functions and has the tax benefits of a partnership, much of the profits of an MLP pass through to the shareholders, avoiding many of the tax burdens of a traditional, publicly-traded company.
The problem in some cases is that many MLPs’ values are based off the commodity oil, which has historically been very volatile. Unfortunately, some brokers and brokerage firms marketed MLPs to its customers as a conservative way to get higher monthly dividends and yield.
As the price of oil has dipped, risen and dipped again, many investor’s investments in MLPs have been greatly diminished or lost altogether – especially since almost 100 North American oil and gas companies have filed for bankruptcy in the past two (2) years.
If you have lost money investing in oil and gas related securities in Linn Energy of LinnCo with Morgan Stanley or any other broker-dealer, contact us. Our lawyers have litigated hundreds of cases through FINRA arbitration and won millions of dollars on behalf of aggrieved investors. Our lawyers represent investors nationwide in securities cases and FINRA arbitration to recover investment losses. There is no fee unless we recover money for you.
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.