Erez Law is currently investigating financial advisors across the country who recommended their clients invest in Peabody Energy Corp.
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, including the value of Peabody Energy Investments. 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.
Peabody Energy Corporation, listed on the New York Stock Exchange as BTU, was the largest coal producer in the United States. In 2014, Peabody saw $787 million of losses, was removed from S&P 500, and had its ratings downgraded to “underperform” and “negative” by Goldman Sachs, Standard & Poor, Bank of America, and others. In April 2016, the company filed for Chapter 11 bankruptcy protection after a drop in coal prices left the company unable to service its $10.1 billion debt. Peabody emerged from bankruptcy in April 2017, with an estimated net debt of $1.1 billion, down more than $6 billion.
A broker must have reasonable grounds for each recommendation made to investors considering such factors as the customer’s other securities holdings, financial situation, and risk tolerance. In addition, before a firm offers a security to its customers, the firm must conduct due diligence, investigating the facts surrounding the security, to confirm that it is suitable for any customer of the firm. The suitability of an investment for a particular individual is at the center of the investment process and one of the key duties owed by a firm and its broker to the customer. A firm may be held liable for its failure to recommend suitable investments to its customers.
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, brokers across the country may be liable for investment or other losses suffered by its 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.