Recovery of Private Placement Losses: Mewbourne Oil

by InvestorLawyers on August 10, 2012

in Arbitration,FINRA,Private Placements,SEC,Securities Fraud,Suitability,Texas

Stock fraud lawyers are currently investigating claims on behalf of investors who suffered significant losses as a result of their investment in Mewbourne Energy Partners or Mewbourne Oil. Based in Tyler, Texas, Mewbourne Energy Partners is, according to its Securities and Exchange Commission Form 10-Q filing, an oil and gas development company.

Recovery of Private Placement Losses: Mewbourne Oil

Beginning May 1, 2007, Mewbourne Energy Partners has offered the public private placements, which certain Financial Industry Regulatory Authority registered broker-dealers then offered and sold, in order for Mewbourne to raise capital. The private placement offering consisted of general and limited partner interests and was a part of the Mewbourne Energy Partners ’07 Drilling Program. When the offering concluded on August 13, 2007, the total investor contributions, originally sold to accredited investors, amounted to $70,000,000. Of this total, accredited investors as limited partner interests amounted to $4,290,000 and accredited investors as general partner interests amounted to $65,710,000.

According to securities arbitration lawyers, private placements allow smaller companies to use the sale of debt securities or equities to raise capital without it becoming necessary for them to register these securities with the Securities and Exchange Commission. Because these investments are typically more complicated and carry more risk than other traditional investments, they are usually only suitable for sophisticated, high-net-worth investors.

Stock fraud lawyers say that because the creation and sale of private placements often carry high commissions, these investments continue to be pushed by brokerage firms despite the fact that they may be unsuitable for investors. Financial Industry Regulatory Authority rules have established that brokers and firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance.

If you suffered significant losses as a result of your investment in Mewbourne Oil private placements, or another private placement, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a securities arbitration lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

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