Ridgewood Energy Fund Investment Losses
Have you suffered investment losses in a Ridgewood Energy Fund? If so, contact the attorney’s at The White Law Group, they may be able to help you recover your investment losses through FINRA arbitration.
Many oil and gas LPs have high expense ratios, and due to the decline in the overall health of the oil and gas market, are suffering. Some are on the brink of default, or worse yet, bankruptcy. Such an outcome is extreme, but not unforeseen. It only highlights the unsuitability of these investments for most retail investors – particularly in large concentrations.
Ridgewood Energy recently sent out letters to investors in the company’s O, Q, S, T, V, and W funds. Each of these funds is invested in Ridgewood’s “Beta Project.”
While the letters provide a rosy outlook for the future, there is some troubling news for investors in these particular Ridgewood Funds.
Due to the costs of the oil exploration, Ridgewood was forced to seek outside financing. Although financing has now been procured, it came at a fairly steep cost for investors. Specifically, Ridgewood has disclosed that in exchange for providing financing, the lender has two sources for earning its return:
(1) Interest on the capital borrowed, which is set at 8% and compounded annually, and
(2) An over-riding royalty interest, in which the lender receives a certain percentage of any remaining production from each fund’s Beta ownership.
Given the current interest rate climate, the fact that the lender is entitled to an 8% return, and an interest in production, demonstrates the risk involved with these fund.
The good news is that investors may be able to recover any losses sustained as a result of their ownership of a Ridgewood Energy private placement.
The White Law Group continues to file FINRA arbitration claims involving oil and gas private placements, like Ridgewood Energy funds, against the brokerage firms and financial professionals that recommended the products.
Financial advisors and broker-dealers have a duty to their clients to perform the necessary due diligence on an investment before offering it for sale to their clients and to ensure that any investment recommendation that is made is suitable in light of the client’s age, investment experience, net worth, and investment objectives. Unfortunately for investors in oil and gas private placements, brokerage firms often down play the risk of these products to their clients and sell the investments as safe, income producing investments.
Recovery of Investment Losses
If you invested in a Ridgewood Energy fund and are interested in your litigation options, please call the securities attorneys of The White Law Group at 888/637-5510 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group, visit http://www.whitesecuritieslaw.com.