Erez Law is currently investigating Morgan Stanley financial adviser Joseph Patrick McGinley (CRD# 327656) regarding misrepresentation and securities violations related to energy investments. McGinley has been registered with Morgan Stanley in Philadelphia, Pennsylvania since 2011.
It is alleged that McGinley recommended investments in the volatile energy sector, including Linn Energy and Sandridge Energy, as well as Alpha Natural Resources, Seadrill Limited, Breitburn Energy Partners LP, and Arch Coal, Inc.
Linn Energy, LLC was an oil and natural gas company headquartered in Houston, Texas. When global crude oil prices dropped, Linn Energy accrued significant debt. According to the company, Linn Energy, LLC filed a voluntary petition for restructuring under Chapter 11 of the Bankruptcy Code in May 2016 to alleviate itself of $6.06 billion in debt. In February 2017, LINN Energy, Inc. was formed as the reorganized successor to Linn Energy, LLC. Morgan Stanley was an underwriter for Linn Energy, and as part of the offering, Morgan Stanley agreed to purchase almost 2 million Linn Energy units offered to the public in May 2015.
SandRidge Energy is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma. Due to high debt and low commodity prices, the company amassed more debt than they would sustain. In May 2016, the company filed for bankruptcy, and in October 2016 they emerged from bankruptcy, eliminating $3.7 billion in debt from its reorganization and opening up $500 million in liquidity.
These and other oil and gas companies have experienced price fluctuations over the past few years, which has put financial stress on the oil and gas industry. 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.
McGinley has been the subject of three customer complaints between 1995 and 2015, according to his CRD report:
- September 2015. “Claimant alleges, inter alia, unsuitability and misrepresentation with respect to equity investments in account – April 2012 to May 2015.” The client sought $70,000 in damages and the case was settled for $17,700.
- April 1995. “Client alleged unauthorized trading, churning, negligence, breach of contract unsuitability and fraud and alleged losses of about $80,000. The claim was settled for $20,000 out of business considerations so that the costs and uncertainties of litigation could be avoided. Dean Witter did not admit any wrongdoing in settling the claim, and the broker continues to vehemently deny the charges.”
- January 1995. “Suitability, misrepresentation, breach of fiduciary duty; actual compensatory damages, asked amount $450,000.00 jointly and severally.” The case was settled for $17,500.
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, Morgan Stanley may be liable for investment or other losses suffered by Joseph Patrick McGinley’s customers.
Erez Law represents investors in the United States for claims against Morgan Stanley financial advisor Joseph Patrick McGinley regarding misrepresentation and securities violations related to energy investments. If you were a client of Morgan Stanley financial advisor Joseph Patrick McGinley 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.