Former Wells Fargo Advisors, LLC Client Wins FINRA Arbitration for Quicksilver Resources Senior Notes Losses
Posted on Thursday, November 1st, 2018 at 10:45 am
In September 2018, a former client of Wells Fargo Advisors, LLC won an award in a FINRA arbitration for compensatory damages for $75,383.75 plus 10% interest per annum for investment losses in Quicksilver Resources Senior Notes. The investors were clients of financial advisor Raymond Kvalvog (CRD# 1325343).
Quicksilver Resources (KWK) is a Fort Worth, Texas-based oil and gas company with assets in the Barnett Shale in the basin of North Texas and the Delaware basin in West Texas. Quicksilver Resources 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, including the value of Quicksilver Resources. While financial advisers can effectively coax clients into lucrative high risk, high yield investments in the oil and gas industry, some fail to fully inform their clients of the inherent risks.
Quicksilver Resources was valued at $1.21 billion. The company declared bankruptcy in March 2015. In January 2016, the company’s U.S. assets were purchased by BlueStone Natural Resources II for $245 million. Quicksilver Resources used these proceeds to pay off its more than $2.35 billion debt.
In August 2016, Quicksilver Resources entered into a Chapter 11 plan of liquidation, which called for the establishment of a liquidation trust that will liquidate and administer assets and make account distributions. The liquidation trustee made its first round of distributions from the liquidation trust in October 2016.
The causes of action included violations of the Securities Act of 1933; violations of the Securities Exchange Act of 1934; violations of the Minnesota Securities Act; violations of the Minnesota Consumer Fraud Act, Uniform Deceptive Trade Practices Act, False Statement in Advertisement Act, and Unlawful Trade Practices Act; breach of contract; common law fraud; breach of fiduciary duty; negligence; and gross negligence. The causes of action related to Claimant’s allegation that Respondents improperly recommended that Claimant invest a significant portion of his life savings and his account held with Wells Fargo in Quicksilver Resources Senior Notes, which was an unsuitable, high-risk investment. The FINRA arbitration hearing was conducted in Minneapolis, Minnesota.
Kvalvog was registered with Dougherty & Company LLC in Fargo, North Dakota from 2013 to 2015 and previously with Wells Fargo Advisors, LLC in Fargo, North Dakota from 2008 to 2013. Kvalvog has also been the subject of two additional customer complaints between 2008 and 2017, one of which was closed without action, according to his CRD report:
November 2016. “Claimant alleges unsuitable investment recommendations were made in accounts opened in or around 2011.” The case is currently pending.
Additionally in October 2010, Kvalvog was sanctioned to $3,000 in civil and administrative penalties and fines by the United States of America Department of the Treasury Comptroller of the Currency regarding, “the OCC alleged that, in his capacity as director of the Farmers and Merchants National Bank of Hatton, Hatton, North Dakota, (the “bank”) Ray Kvalvog failed to ensure that the bank took the necessary actions to achieve compliance with several provisions of the formal agreement entered into on May 11, 2009.”
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 Advisors, LLC may be liable for investment or other losses suffered by Kvalvog’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.Disclaimer: Clients are responsible for costs. Contingency fee is calculated before deducting costs incurred in the case.