Resource Royalty XVII, LLC – Investigation – Complaints, Lawsuits & Recovery Options
The White Law Group is investigating potential securities claims involving Resource Royalty XVII, LLC, an oil and gas mineral rights offering formed in 2022 in Texas. If you invested in this offering—often sold through broker-dealers as an income-producing energy investment—you may be wondering about the risks involved and what options are available if the investment has not performed as expected.
What is Resource Royalty XVII, LLC?
According to SEC filings, Resource Royalty XVII, LLC was formed in 2022 and operates out of Dallas, Texas (5949 Sherry Lane, Suite 1100). The private placement offering was structured under Regulation D, Rule 506(b) and sought to raise approximately $14.3 million, with a minimum investment of $100,000.
The offering indicates the sale of mineral property securities, a category of oil and gas investments often marketed to accredited investors seeking income through royalty interests.
The issuer reported paying up to 6% sales commissions to broker-dealers, including JCC Capital Markets, LLC (CRD #146776), with sales occurring across numerous states.
Risks of Oil & Gas Private Placements
Oil and gas private placements—whether drilling programs, lease acquisitions, or mineral rights funds—are widely considered high-risk, illiquid investments. Common risks include:
1. Commodity Price Volatility
Returns are closely tied to fluctuating oil and gas prices, which can significantly affect projected distributions.
2. Illiquidity
Investors typically cannot sell their interests on a secondary market, meaning capital may be tied up for years.
3. High Fees and Commissions
Up-front fees, broker commissions, and offering expenses can reduce the investment’s potential profitability.
4. Operational and Geological Risks
Production volumes and reserves may not meet projections, particularly if assumptions about well performance prove inaccurate.
5. Concentration Risk
Oil and gas investments are often tied to a limited geographic area or operator, magnifying exposure to local economic or regulatory changes.
6. Lack of Transparency
Private placements are not subject to the same reporting requirements as publicly traded investments, making it harder for investors to evaluate performance.
Broker Due Diligence Obligations
FINRA rules require broker-dealers to conduct reasonable due diligence on any investment they recommend. They must also ensure that recommendations are suitable for each customer based on factors such as:
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Investor’s risk tolerance
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Financial situation
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Investment objectives
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Liquidity needs
Unfortunately, oil & gas private placements are sometimes sold to investors who may not fully understand the risks or who may not be suitable for such high-risk, speculative offerings.
If a broker failed to adequately disclose risks, performed inadequate due diligence, or recommended Resource Royalty XVII contrary to your investment profile, you may have grounds for a claim.
FINRA Arbitration vs. Class Actions
Investors often assume their only recourse is a class action, but most claims involving the sale of private placements are handled through FINRA arbitration, not the courts.
FINRA Arbitration
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Allows investors to pursue claims against the broker-dealer, not the issuer.
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Typically faster and more efficient than court litigation.
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Focuses on whether the financial advisor violated industry rules.
Class Actions
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Generally target the issuer, not the selling brokerage firm.
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Less common in private placement cases.
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Investors may receive smaller recoveries spread across large groups.
For most investors in offerings like Resource Royalty XVII, LLC, FINRA arbitration is usually the most viable path to recover losses.
Concerned About Your Investment? The White Law Group May Be Able to Help.
If you invested in Resource Royalty XVII, LLC and are experiencing losses or concerns about how the investment was recommended, you may be able to recover damages through a FINRA arbitration claim against the broker-dealer that sold it to you.
The White Law Group has recovered millions of dollars for investors in oil and gas private placements nationwide.
