Haselkorn and Thibaut is a nationwide investor law firm (www.investmentfraudlawyers.com) that is investigating potential violations of sales practices by financial advisers recommending investments related to Yuma Energy, Inc. (NYSE: YUMA) and other energy sector companies to investors.
Yuma Energy, Inc. focuses on the acquisition, development, and exploration of conventional and unconventional oil and natural gas resources in the United States. It has land-based properties located in central and southern Louisiana and southeast Texas and assets operated and non-operated in south Louisiana, including Cameron, LaFourche, Livingston, St. Helena, St. Bernard, and Vermilion parishes. The company also has operated and non-operated assets located in Jefferson and Madison counties, southeast Texas, non-operated position in East Texas Woodbine, and operated positions in Kern County, California. Yuma Energy, Inc. (YUMA) is based in Houston, Texas.
Looking back, YUMA’s stock price was generally in the $3.00 range from mid-2019 and remained in that range until the fourth quarter of 2019. In early 2020, YUMA was in the $3.00 range until early March 2020. Most recently, YUMA is trading below $1.75. Although the reference here is the share price, some investors may have exposure in mutual funds or through high yield bonds (or junk bonds) and other securities.
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Yuma Energy Default
On April 7, 2020, Yuma Energy, Inc. (NYSE: YUMA) announced that it had been notified by its lender that all outstanding payments under its current Credit Agreement are currently due and that its Restructuring Agreement has been terminated. YUMA had previously disclosed on March 20, 2020, that it was not in compliance with the various terms of the Restructuring Agreement and related credit agreements, and that YUMA had no further funds available under the facility.
On April 3, 2020, YUMA received written notice from the lender that numerous defaults and defaults that its Restructuring Agreement has been terminated. Consequently, the lender canceled all loan commitments and accelerated payments, including accrued interest, fees, and other obligations, all of which are now immediately due. YUMA received written notice from the lender and also that the Restructuring Agreement has even been automatically terminated.
In September 2019, YUMA entered into a Restructuring Agreement. YUMA’s acting CEO has commented that YUMA’s ability to make interest payments on time has been hampered by the dramatic collapse of oil prices, certain well failures, and economic uncertainty caused by the COVID-19 virus. Accelerating all outstanding lender-required payments now will likely force YUMA to suspend our business plan, sell assets, or possibly take other remedial actions such as seeking bankruptcy protection. ”
Yuma Energy Lawsuit “FINRA”
Haselkorn and Thibaut, P.A. Law Firm is investigating possible violations of sales practices by financial advisers who recommended YUMA and many similar investments in the energy sector sold to investors.
For many investors, particularly hard hit by the coronavirus, financial advisers often recommended these energy-related types of investments. It is reported that advisors did not disclose the potential level of risk that was realized, and investors did not know the actual level of risk.
Although financial advisers can claim that these were unforeseen market events, the reality is that these are risks similar to those experienced in the 2008-2009 financial crisis. These potential risks were material risks that should have been adequately disclosed to clients before recommending these investments individually or as part of an investment strategy or portfolio.
Oil, gas, and energy-related investments have been promoted in recent years as an attractive source of dividend income in an environment of low-interest rates. It is important to note that in making such recommendations to investors, the securities industry laws, rules, and regulations require a fair and balanced disclosure of material risks.
Yuma Energy investors are encouraged to Contact Haselkorn & Thibaut, P.A. at 1 888-628-5590 for a free consultation.