Erez Law is currently investigating J.J.B. Hilliard, W.L. Lyons, LLC financial advisor Gary Lee Richards (CRD# 2224200) regarding his investment strategy concentrating portfolios in high risk energy stocks. Richards has been registered with J.J.B. Hilliard, W.L. Lyons, LLC in Steubenville, Ohio since 1992.
In December 2016, a former customer filed a complaint against Richards with FINRA, alleging “an overconcentration of unsuitable securities were purchased and held in their accounts.” The elderly customer was looking to maintain a conservative investment portfolio, preserve capital and generate income. Instead, it is alleged that Richards concentrated the portfolio in high risk and unsuitable oil and gas investments, including:
- Linn Energy, LLC
- Kinder Morgan
- Enterprise Product Partners
- Energy Transfer Partners
The energy sector experienced significant turmoil, and Linn Energy and other energy companies were negatively impacted when global crude oil prices fell below $40 per barrel at the end of 2015. This was the lowest level since early 2009, as supply was in excess of global demand.
During this time, Linn Energy issued high risk “junk bonds.” A junk bond is a high yield and high risk security. Junk bonds have a speculative nature and a higher default risk and yield in relation to investment-grade bonds with a higher credit ranking. Junk bonds are risky investments that have a speculative appeal because of their high-yield nature. According to a statement on their website, Linn Energy, LLC filed a voluntary petition for restructuring under Chapter 11 of the Bankruptcy Code in May 2016. In February 2017, LINN Energy, Inc. was formed as the reorganized successor to Linn Energy, LLC.
According to the complaint, neither J.J.B. Hilliard, W.L. Lyons, LLC nor Richards attempted to diversity the customer’s portfolio or protect their irreplaceable retirement savings. Due to these investments, the customer suffered significant losses and is now seeking $125,000 in damages due to alleged losses sustained from a 70% concentration in these high risk energy stocks, without downside protection or a hedging strategy in place.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, J.J.B. Hilliard, W.L. Lyons, LLC may be liable for investment or other losses suffered by Richard’s customers.
Erez Law represents investors in the United States for claims against J.J.B. Hilliard, W.L. Lyons, LLC financial advisor Gary Lee Richards, who is alleged to recommend high-risk energy stocks. If you were a client of J.J.B. Hilliard, W.L. Lyons, LLC financial advisor Gary Lee Richards or another firm, and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.