Texakoma Exploration & Production LLC – Investigation | Oil & Gas Private Placement
If you invested in Texakoma Exploration & Production LLC, you may be evaluating the performance of your investment or concerned about potential losses. The White Law Group is investigating whether brokerage firms that recommended Texakoma’s offerings may have failed to conduct adequate due diligence before selling these high-risk oil and gas securities to retail investors.
According to a Form D filed with the Securities and Exchange Commission, Texakoma Exploration & Production LLC, based in Plano, Texas, initiated an exempt offering of mineral property securities relying on Rule 506(b) of Regulation D.
About Texakoma Exploration & Production LLC
-
Entity type: Limited Liability Company
-
Jurisdiction: Texas
-
Year formed: Over five years ago
-
Industry: Oil & Gas
The company’s Form D indicates a total offering amount of $2,680,000, with $301,500 sold to 7 investors as of the filing date. The minimum investment was $16,750, and the offering was not intended to last more than one year.
The filing also shows approximately $321,600 in sales commissions paid to Texakoma Financial Inc. and $80,400 in proceeds designated for payments to executive officers.
Risks of Oil & Gas Private Placements
While oil and gas investments can be attractive for their potential tax benefits and high returns, private placements such as those offered by Texakoma often carry significant risks, including:
1. Illiquidity
Reg D offerings are not publicly traded, meaning investors often cannot sell their interests if the investment performs poorly.
2. High Commissions
Sales charges—sometimes exceeding 10%—provide strong incentives for brokers to recommend these offerings regardless of suitability.
3. Commodity Price Volatility
Fluctuations in oil and gas prices can directly impact revenue and profitability, increasing the risk of substantial investment losses.
4. Operational and Geological Risk
Drilling results are inherently uncertain. Many projects fail to produce as projected, leading to underperformance.
5. Limited Transparency
Private companies are not required to provide the same level of financial reporting as publicly traded entities, making it difficult for investors to assess ongoing performance.
Broker Due Diligence Obligations
FINRA requires brokerage firms to:
-
Conduct a reasonable investigation into the investment’s risks and merits
-
Ensure recommendations are suitable given the client’s financial profile
-
Disclose all material risks
If a broker failed to adequately investigate Texakoma’s offering or recommended it to an investor for whom it was not appropriate, the firm may be liable for losses through a FINRA arbitration claim.
FINRA Arbitration vs. Class Actions
Investors frequently ask how recovery through FINRA arbitration compares with participating in a class action.
FINRA Arbitration
-
Individualized claim against the brokerage firm
-
Typically faster than court litigation
-
Potentially higher recovery because cases are based on your specific facts
-
Private and streamlined process
Class Actions
-
Filed against the issuer itself
-
Recovery is shared among all class participants
-
Often takes years to resolve
-
Typically results in smaller, pro-rata payouts
Most investors seeking compensation for unsuitable investment recommendations pursue FINRA arbitration, not class actions.
Recovery Options for Investors
If your financial advisor recommended an investment in Texakoma Exploration & Production LLC without fully disclosing the risks or ensuring suitability, you may be able to recover losses through a FINRA Dispute Resolution claim.
The White Law Group has represented thousands of investors in claims involving high-risk energy investments, including drilling programs, mineral rights funds, and other private placements.
FAQs
Can I sue my broker for recommending an unsuitable oil and gas investment?
Yes. If the recommendation was unsuitable or the firm failed to conduct adequate due diligence, you may be able to file a FINRA arbitration claim.
How long do I have to file a claim?
Time limits vary. It is important to speak with a securities attorney promptly to preserve your rights.
Concerned About Your Investment? Call The White Law Group
If you invested in Texakoma Exploration & Production LLC and are concerned about investment losses, the securities attorneys at The White Law Group may be able to help.
