As oil prices crashed to near-zero levels during the coronavirus emergency, it exposed risky energy investments that in many cases have proven harmful to conservative or moderate investors for whom the oil and gas recommendations were unsuitable to begin with. In many cases, unsuitable oil-and-gas recommendations and over-concentration of a portfolio in the risky and speculative oil-and-gas sector can have devastating consequences for investors when the market fails.
In 2017, FINRA barred two brokers at Wells Fargo Advisors' office in Irvine, California for unsuitably over-concentrating customer funds in speculative oil and gas securities, resulting in "significant customer losses." Many of these customers were elderly and retiree investors for whom the risky investments were decidedly unsuitable.
If a broker or financial adviser unsuitably recommended you invest in an energy sector complex product, such as oil and gas Business Development Companies (BDCs), Exchange-Traded Funds (ETFs), Exchange-Traded Notes (ETNs), or Master Limited Partnerships (MLPs), you may be entitled to recover certain losses if the representative acted negligently in recommending an excessively risky product to you, despite your stated investment objectives as a risk-averse client.
The same holds true if a broker or adviser over-concentrated your position in oil-and-gas or another risky sector.
Additional oil-and-gas/energy investments hit particularly hard during COVID-19 include:
Energy Transfer LP (ET)
If you have invested with any broker, financial adviser, or firm whose unsuitable recommendations of a complex oil-and-gas security or over-concentration of your portfolio in the energy sector or stocks has proven harmful to your investments or interests or resulted in excessive losses, such as the case brokers in Wells Fargo's south Orange County branch whose unsuitable over-concentration of customers' positions in risky and speculative oil-and-gas securities resulted in huge losses, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.