The energy industry is on its knees on oil prices crashing to 17-year lows, amidst a glut in supply triggered by low demand due to the COVID-19 pandemic. Lockdowns, isolation as well as quarantines in some of the biggest economies in the world led by China and the U.S has significantly taken a toll on the Energy 11 and 12 LP investments by David Lerner Associates given the ever-declining demand for energy products.
Energy 11 Sales Practice Investigations
Similarly, investors continue to lose a significant amount of money on financial advisors recommending energy sector-related investments without taking into consideration the turmoil triggered by the Coronavirus pandemic.
Haselkorn & Thibaut, P.A. law firm, has since lodged investigation over potential sales practice violations by some financial advisors. The law firm is especially focusing on financial advisors who recommended Energy 11 LP investment to main street investors without warning them of the potential risks associated with the investment among other energy sector-related investments
Energy 11 LP is a special type of investment product focused on acquiring an interest in leaseholds as well as royalty interest and production payment in producing and non-producing oil and gas properties. The energy sector-focused investment product has taken a toll on the broader sector, turning bearish given the glut in supply amidst low consumption of oil-related products.
For instance, the Blackrock GF World Energy Fund, which invests 70% of its total assets in equity securities of companies and businesses in the energy sector, is already down by more than 40%. The plunge comes at the backdrop of an impressive run in 2019 that saw it register double digits growth.
The 40% plunge provides a clear insight of the amount of losses that investors might have accrued on being advised to invest in energy-focused investment without taking into consideration risks involved.
Energy 11 LP, among other energy sector investments, were initially marketed as low volatile and conservative products by financial advisors. However, that has turned not to be the case as a good number of investors are now faced with substantial losses given the exacerbated amount of risk in the energy sector.
In addition, Haselkorn & Thibaut, P.A. is also investigating financial advisors that recommended iPATH Treasury Long Bond ETN to investors. The ETN bills itself as an investment product focused on providing investors with exposure to the Barclays Long Bond. The ETN is down by more than 90% resulting in significant losses to investors who heeded financial advisor’s recommendation.
Most investors invested in DLBS on the promise it was a conservative, and less volatile investment. However, that did not turn out to be, as DLBS has resulted in substantial losses with a recovery not in sight.
Haselkorn & Thibaut FINRA Arbitration
While most financial advisors insist that the turmoil in the energy sector is as a result of unforeseen market events, they ought to have known better going by the 2008-2009 financial crisis. Haselkorn & Thibaut law firm has especially taken issue with the fact that the financial advisors did not disclose to would-be investors potential risks associated with investing in such products. The risks should have been appropriately disclosed before any recommendation.
Financial advisors find themselves in hot water on recommending oil and gas energy linked products as an attractive source of dividend income in low interest rate environment. The fact that these investments were sold without proper risk disclosures more so to senior or conservative income-seeking investors raises serious questions.
Haselkorn and Thibaut P.A s offering its services to investors who might have lost their hard-earned money due to the wrong misinterpretation of the risks involved. The firm is especially opened to overseeing on behalf of its clients the FINRA arbitration process that enables investors to bring a claim and potentially recoup their investment losses.
Ruchi has an Accounting and Graduate Degree in Business from the International School and Business and Media. She is exceptionally skilled in financial databases like Bloomberg, ThomsonOne,Datastream, CapitalIQ, and Factiva. Her focus at AlphaBetaStock.com is research breaking stocks and investment stories.