Did you lose money investing in Brookshire Partners II, L.P.?
Galvin Legal, PLLC is launching an investigation on behalf of investors who suffered losses investing in Brookshire Partners II, L.P. at the recommendation of their financial advisor. If you suffered losses investing in the investment, then Galvin Legal, PLLC may be able to help you recover your losses in a Financial Industry Regulatory Authority (“FINRA“) arbitration claim against the brokerage firm that recommended the investment.
As energy prices have declined so has the value of energy investments. Many investors have suffered significant losses in energy investments that were recommended to them by the financial advisor. Many of these investments were high risk and were unsuitable for their portfolios.
According to its website, Waveland invests in oil and gas exploration and development throughout the Mid-Continent and Permian Basin regions of the United States alongside many of the largest and most active E&P companies in North America.In addition, Waveland has deployed invested capital to special private equity opportunities in select sectors such as medical device, health sciences, technology, and manufacturing.
About Brookshire Partners II, L.P.
According to its website, Brookshire Partners I, L.P. and Brookshire Partners II, L.P. were sponsored by Waveland Energy Partners LLC to enable investors to own working interests in wells drilled on the Brookshire Dome Prospect located in Waller County and Austin County, Texas, approximately 40 miles west of Houston. Brookshire I was bought out in early 2002, returning 100% of the investors’ capital. Brookshire II was subsequently formed in April of 2002 and sold 100% of its assets in a transaction that closed in April 2007. Combined with previous distributions made to investors during the operations phase of the partnership, the sale provided a pre-tax return to investors of 170% of the total capital invested in the partnership.
Due Diligence Requirement
FINRA requires brokerage firms to conduct due diligence on investments, such as Brookshire Partners II, L.P., and to conduct a suitability analysis when recommending securities to a customer that takes into account the customer’s knowledge and experience. FINRA Rule 2111(a) states that “a member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose to the member or associated person in connection with such recommendation.”
Rule 2111 is composed of three main obligations: reasonable-basis suitability, customer-specific suitability, and quantitative suitability. Brokerage firms that fail to conduct adequate due diligence on investments they recommend, such as Brookshire Partners II, L.P., or that make unsuitable recommendations can be held responsible for the customer’s losses in a FINRA arbitration claim.
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