Horsehead Holding Corp. – Securities Investigation

Investigating Potential Claims – Horsehead Holding Corp.

The White Law Group is investigating potential claims involving broker dealers who may have unsuitably recommended Horsehead Holding Corp to investors.

Horsehead Holding is a producer of zinc and nickel products in Pittsburgh, PA. The company filed for Chapter 11 bankruptcy protection in February 2016.

According to an article in the New York Times, just before the February filing, the company’s assets were valued at $1 billion. Six months later, Horsehead’s financial adviser estimated that the company’s assets were worth about one-third of that.

Shareholders are reportedly questioning why the company decided to write down to almost zero the new zinc plant in Mooresboro it built for $550 million.

Horsehead Holding Corp. has filed several Regulation D Private Placements to raise capital from investors.  Investments like this 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 Horsehead Holding Corp. 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.

Horsehead Holdings Corp. Investigation

The White Law Group is investigating the liability that brokerage firms may have for improperly selling investments like Horsehead Holding 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 Horsehead Holding or another 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.