Erez Law is currently investigating Wells Fargo financial advisor Jeffrey Wilson (CRD# 1161819) regarding unsuitable energy investments. Wilson has been registered with Wells Fargo in Las Cruces, New Mexico since 2014.
Over the past few years, oil prices have significantly declined. A supply glut in 2014 and 2015 led to some of the lowest prices the market has seen in recent years. In turn, securities values also dropped. The volatile energy sector experienced significant turmoil, and many 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. Oil and gas companies experienced a spike in bankruptcies, which have left many investors reeling.
Wells Fargo brokers, including Jeffrey Wilson, may have recommended investments in oil and gas companies, including Swift Energy, Memorial Production Partners, Martin Midstream Partners, Seadrill, and Breitburn Energy Partners.
Swift Energy Co. is an independent oil and natural gas company that filed for Chapter 11 bankruptcy in October 2016, eliminating $1.23 billion in debt.
Memorial Production Partners LP is a MLP – a publicly-traded limited partnership that combines the tax benefits of a limited partnership with the liquidity of publicly traded securities – that eliminated $1.3 billion in debt by filing for reorganization under Chapter 11 bankruptcy in January 2017.
Martin Midstream Partners L.P. is a limited partnership that engages in the storage, transportation and distribution of petroleum products and by-products. According to MacroAxis, it has a 38% probability or declaring bankruptcy, as of January 2018.
Seadrill was once valued at $23.7 billion but with the decline in oil prices, the company is now worth about $398 million with liabilities that exceed its current assets by nearly double. As of April 2017, Seadrill was on the brink of bankruptcy and in the process of a restructuring plan, and the company commenced Chapter 11 bankruptcy as of September 12, 2017 and is in the process of restructuring. As of June 2017, Seadrill traded on the New York Stock Exchange (NYSE) for $0.45. As of January 20, 2017, Seadrill traded on the NYSE for $.28.
Breitburn Energy Partners experienced a decline in commodity prices beginning in 2014 and the company’s debt burden became unsustainable. Breitburn filed for Chapter 11 bankruptcy to restructure its balance sheet in May 2016 and eliminated $5.8 billion in debt, according to a statement on the company’s website
Wilson has been the subject of four customer complaints between 2015 and 2017, according to his CRD report:
- August 2017. “Claimant alleges that in or around August 2014, the FA recommended the purchase of unsuitable energy securities.” The case is currently pending.
- May 2016. “Client alleged unsuitable energy and other investments. (6/1/2014-11/1/2015).” The case was settled for $250,000.
- May 2016. “Claimant alleges that investment recommendations made in or about 2014 were misrepresented and unsuitable.” The client sought $1 million in damages and the customer was awarded $357,000.
- December 2015. “Client alleged excessive trading, unsuitable investments and excessive risk. (6/4/2014-12/7/2015).” The client sought $500,000 in damages and the case was settled for $275,000.
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, Wells Fargo may be liable for investment or other losses suffered by Wilson’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If 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.