Did you lose money investing in Texoma Partners, L.P.?
Galvin Legal, PLLC is launching an investigation on behalf of investors who suffered losses investing in Texoma Partners, 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 Texoma Partners, L.P.
According to its website, In March 2007, Texoma Partners, L.P. (the “Fund”), a leasebank and pipeline investment fund managed by Waveland Energy Ventures LLC, acquired a 60% working interest in 35,000 leased net mineral acres in the emerging Woodford Shale Play in southeastern Oklahoma (“Texoma” or the “Project”) from Oracle Resources, Ltd. (“Oracle”), an independent oil and gas company based in Dallas, Texas. During 2007, the Fund began the joint development of the Project with Oracle by drilling nine wells and building a pipeline infrastructure. In July 2007, Chesapeake Energy (NYSE:CHK, “Chesapeake”) offered to buy certain working interests and pipeline assets from Oracle and the Fund at a substantial premium to the price paid by the Fund. In late 2007, Oracle closed on the sale of the 40% interest it owned in the Project to Chesapeake. On January 9, 2008, the Fund closed on the sale of 50% of its working interests in the leases it held at Texoma and 100% of its interests in the pipeline. Excluded from the Fund’s transaction were 4,720 acres on which the nine wells were drilled by three Waveland drilling funds. The Fund now owns half of its original 60% interest (i.e., 30%) in the Project, has received in excess of 100% of its originally invested capital in approximately 18 months, retains carried interests in sections where the nine initial wells were drilled, and will continue to receive cash distributions from the future sale of leased acreage and carried interests in future wells drilled by Waveland-managed drilling funds on the Project’s acreage. In addition, the Fund will benefit from the operating expertise of Chesapeake, the most active driller of natural gas wells in the U.S. In addition to the substantial economic return potential to investors in the Fund, the Fund secured a valuable and unique opportunity for Waveland’s drilling fund investors to participate with Chesapeake in what is believed to be one of the highest potential shale-gas plays in the U.S.
Due Diligence Requirement
FINRA requires brokerage firms to conduct due diligence on investments, such as Texoma Partners, 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 Texoma Partners, 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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