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Erez Law Investigates J.P. Morgan For Overconcentrated Energy Investments

Posted on Wednesday, May 10th, 2017 at 8:18 pm    

Erez Law is currently investigating J.P. Morgan financial advisors across the country who recommended an investment strategy concentrated in the volatile energy sector.

A retired widow and novice investor from Wisconsin recently filed a FINRA arbitration against J.P. Morgan for recommendations by her broker to overconcentrate investments in the oil and gas market. The investor seeks to recover losses to her irreplaceable retirements savings, due to the decline in value of these investments, some of which have since declared bankruptcy.

It is alleged that the JP Morgan broker recommended investments in the volatile energy sector, including:

  • Peabody Energy Corp.
  • Atlas Resource Partners LP3
  • Azure Midstream Partners, LP
  • Linn Energy LLC
  • Breitburn Energy Partners, LP

Peabody Energy Corp. was the largest U.S. coal producer. 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.

Atlas Resource Partners, L.P. was an exploration and production company. Atlas Resources Partners filed for bankruptcy in July 2016 and executed a restructuring plan that it has said will cut debt by about $900 million, reduce interest expense by $80 million, and to alleviate itself of $1.36 billion in debt. Atlas Resource Partners emerged from bankruptcy protection in September 2016 protection with a new name, Titan Energy LLC.

Azure Midstream Partners, LP is a fee-based, growth oriented limited partnership formed to develop, operate, and acquire midstream energy assets. Azure Midstream Partners, LP entered into Chapter 11 bankruptcy protection in January 2017, in an effort to manage its debt obligations and conserve its value.

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.

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.

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.

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.P. Morgan may be liable for investment or other losses suffered by its customers.

Erez Law represents investors in the United States for claims against J.P. Morgan financial advisors across the country, who are alleged to overconcentrate investment portfolios in the high risk and volatile energy sector. If you were a client of J.P. Morgan 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.