Investigation into U.S. Energy Genesis Drilling Program II

U.S. Energy Genesis Drilling Program II Investment Losses

Have you suffered losses investing in U.S. Energy Genesis Drilling Program II? If so, The White Law Group may be able to recover your losses through an arbitration claim against the broker-dealer that sold you the investment.

According to their website, U.S. Energy Development Corporation is an independent oil & gas companies that has invested, operated, and/or drilled more than 3,000 wells throughout 12 states and Canada. U.S Energy is affiliated number of drilling programs offering investors limited partnerships.

U.S. Energy Genesis Drilling Program II is a limited partnership launched in 2012. According to a Form D filed by Genesis with the SEC, the total offering amount for Genesis was $44 million. It included more than $5 million going towards sales commissions to broker-dealers that sold the investment.

The Problem with Limited Partnerships

The trouble with limited partnerships, like Genesis Drilling Program II, is that they involve substantial risks and are more appropriate for sophisticated investors.

Many oil and gas LPs have high expense ratios, and due to the decline in the overall health of the oil and gas market, are suffering. Some are on the brink of default, or worse yet, bankruptcy.  Such an outcome is extreme, but not unforeseen. It only highlights the unsuitability of these investments for most retail investors – particularly in large concentrations.

Unfortunately, some brokers may have downplayed the risks associated with limited partnerships. They have misled investors into thinking that they are “safe” investment products. The high sales commission brokers earned for selling such products may provide some brokers with enough incentive to push the product to unsuspecting investors. Compared to your typical stock or mutual fund that offer 1%-2% commission, the commission for limited partnerships like Genesis are more than 10%.

If a broker misleads a client or makes unsuitable investment recommendations they can be liable for investment losses.

Recovery of Investment Losses

To determine whether you may be able to recover investment losses incurred as a result of your purchase of Genesis Drilling Program II, please contact The White Law Group at 1-888-637-5510.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm. The firm has offices in Chicago, Illinois and Seattle, Washington.