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Did You Lose Money In Ridgewood Energy?

Posted on Wednesday, April 5th, 2017 at 9:58 am    

Erez Law is investigating customer complaints against brokerage firms across the United States for improper sales practices and unsuitable investment recommendations with regards to Ridgewood Energy Funds. Ridgewood Energy is an energy-focused private equity firm with offices in Houston and New Jersey.

Ridgewood Energy Funds and other oil and gas investments have experienced price fluctuations during 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 Ridgewood Energy Funds. 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.

Ridgewood Energy Funds have high broker, brokerage firm and tangible and intangible drilling cost fees of 13% or greater. The supposed appeal of these funds is the first year tax write-off and quarterly tax distributions from the sale of these funds. Just as with many other oil and gas securities, Ridgewood Energy Funds declined. However, due to the burden of high fees, the losses due to these funds are even harden hitting for investors. Investments in funds such as these are not ideal for those looking to supplement income or make safe, high yielding investments.

Ridgewood Energy has offered many deals that may not have been suitable investments, including:

  • Ridgewood Energy Fund I
  • Ridgewood Energy Fund II (closed at $1.1 billion in January 2014)
  • Ridgewood Energy Fund III (closed at $1.9 billion in July 2015)
  • Ridgewood Energy Fund J
  • Ridgewood Energy Fund K
  • Ridgewood Energy Fund L
  • Ridgewood Energy Fund M
  • Ridgewood Energy Fund N
  • Ridgewood Energy Fund O
  • Ridgewood Energy Fund P
  • Ridgewood Energy Fund Q
  • Ridgewood Energy Fund R
  • Ridgewood Energy Fund R
  • Ridgewood Energy Fund S
  • Ridgewood Energy Fund T
  • Ridgewood Energy Fund U
  • Ridgewood Energy Fund V
  • Ridgewood Energy Fund W
  • Ridgewood Energy Fund X
  • Ridgewood Energy Fund Y
  • Ridgewood Energy Fund Z

Investors in Ridgewood Energy Funds O, Q, S, T, V, and W may have experienced significant losses when the company sought outside financing due to the growing costs of oil exploration. To secure the financing, Ridgewood Energy took out 8% on interest on the capital borrowed from the outside financing source, and provided the financing source with royalty interest that allowed them to receive a percentage of production from the fund’s ownership. These two added factors prove costly and risky for investors in those funds.

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 as of results of investments in Ridgewood Energy.

Erez Law represents investors in the United States for complaints against brokers for improper sales practices in the sale of Ridgewood Energy Funds. If you have experienced investment losses as a result of Ridgewood Energy Funds, 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.