Did You Lose Money Investing in iPath S&P GSCI Crude Oil Total Return Index ETN and VelocityShares 3x Long Crude Oil ETN?
Posted on Thursday, July 20th, 2017 at 10:19 am
Erez Law is currently investigating financial advisors across the country who recommended investments in iPath S&P GSCI Crude Oil Total Return Index exchange traded note (ETN), traded on the stock exchange as OIL, and VelocityShares 3x Long Crude Oil ETN, traded on the stock exchange as UWTI.
The performance of these ETNs are linked to oil prices and the energy sector, including master limited partnerships and commodities. 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.
Issued by Barclays Capital, iPath S&P GSCI Crude Oil Total Return Index ETNs are unsecured debt that is designed to provide exposure to the S&P GSCI® Crude Oil Total Return Index, and they are riskier than ordinary unsecured debt securities and have no principal protection. According to the iPath website, “An investment in the ETNs involves significant risks, including possible loss of principal, and may not be suitable for all investors.” After a peak of $25 per share in 2014, the stock currently trades at $4.61 per share.
Issued by Credit Suisse AG, VelocityShares 3x Long Crude Oil ETN is a heavily-leveraged exchange traded product that includes leveraged long and inverse positions in futures on natural gas, and light sweet crude oil as measured by the S&P GSCI indices. According to the fund website, the ETN long product is designed to change in value by daily-resetting 3x multiple of any increase or decrease in the underlying index, while the inverse products are designed to change in value by a daily-resetting 3x multiple of the inverse of any increase or decrease in the underlying index. The value of this product has fluctuated from a peak of $60 per share in 2012, down to $3.50 in 2015, and then $40 in 2016. The stock was delisted from the New York Stock Exchange in late 2016, and it currently trades at $12.55 per share on the OTC Markets.
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, brokerage firms 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 financial advisors across the country who recommended investments in iPath S&P GSCI Crude Oil Total Return Index ETN (traded on the stock exchange as OIL) and VelocityShares 3x Long Crude Oil ETN (traded on the stock exchange as UWTI). If you 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.