Did you lose money investing in Sable Permian Resources?
Galvin Legal, PLLC is launching an investigation on behalf of investors who suffered losses investing in Sable Permian Resources 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.
According to a press announcement on June 26, oil and gas producer Sable Permian Resources filed for Chapter 11 bankruptcy protection in the Southern District of Texas, after a deep decline in oil prices during COVID-19 global pandemic. The company, based in Houston, TX, purportedly said it had secured debtor-in-possession (DIP) financing of $150 million to fund its operations during the restructuring and that it was working with advisers and stakeholders on a range of alternatives. The company was purportedly created last year when American Energy – Permian Basin LLC, merged with its parent company in an attempt to avoid bankruptcy.
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.
Due Diligence Requirement
FINRA requires brokerage firms to conduct due diligence on investments, such as Sable Permian Resources, 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 Sable Permian Resources, or that make unsuitable recommendations can be held responsible for the customer’s losses in a FINRA arbitration claim.
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