Securities Investigation – Fieldwood Energy and Riverstone Holdings
Fieldwood Energy LLC, reportedly one of the largest oil producers in the Gulf of Mexico, filed for bankruptcy protection February 15 after reaching a deal with creditors on a $1.6 billion debt-for-equity swap that also includes the acquisition of Noble Energy Inc.’s Gulf-based oil and gas assets.
According to its website, Fieldwood Energy is a “portfolio company” of energy investment firm Riverstone Holdings focused on acquiring and developing conventional assets, primarily in the Gulf of Mexico region.
Riverstone Holdings has filed several Regulation D Private Placements to raise capital from investors, like Riverstone Fieldwood Partners LP. Investments such as Riverstone Fieldwood Partners LP, are typically sold by brokerage firms in exchange for a large up front commission. High fees can range from 7-10%, as well as additional “due diligence fees” that can range from 1-3%.
Regulation D private placement investments such as Riverstone Fieldwood Partners LP involve a high degree of risk. They are typically sold as unregistered securities which lack the same regulatory oversight as more traditional investment products like stocks or bonds.
An additional risk inherent to these offerings is the general risk that comes with the energy market. The energy market has seen enormous losses over the last few years due to the declining cost of oil and other energy commodities. These investments may seem wise at first, until the dramatic drop in distributions.
Investigating Potential Claims
The White Law Group is investigating the liability that brokerage firms may have for improperly selling energy investments like Riverstone Fieldwood Partners LP to investors.
Broker dealers that sell private placements are required to perform adequate due diligence on all investment recommendations. They must ensure that each investment recommendation that is made is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.
Alternative investments such as these, have high sales commissions and due diligence fees. These high commissions and fees can provide brokers with an enormous incentive to push the product to unsuspecting investors who do not fully understand the risks. They may even focus on the income potential and tax benefits while downplaying the risks.
Fortunately, FINRA does provide for an arbitration forum for investors to resolve such disputes. If a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be found liable for investment losses in a FINRA arbitration claim.
Free Consultation with a Securities Attorney
If you are concerned about your investment in Riverstone Fieldwood Partners LP or another Rivertone Fieldwood private placement investment, please contact The White Law Group at 1-888-637-5510 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee. The firm represents investors throughout the country in claims against their brokerage firm.
For more information on the firm and its representation of investors, visit WhiteSecuritiesLaw.com.
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