January 6, 2015 Comments (0) Blog, Securities Fraud

Recovery of BP Prudhoe Bay Royalty Trust Losses

(Last Updated On: July 17, 2015)

Have you suffered losses investing in BP Prudhoe Bay Royalty (NYSE:BPT)?  To the extent that you purchased the investment at the recommendation of a financial advisor, the securities attorneys of The White Law Group may be able to help you recover your losses through a FINRA arbitration claim.

The BP Prudhoe Bay Royalty Trust is a United States oil and national gas royalty trust based in New York. With a market capitalization of US$ 1.6 billion in early 2008, and an average trading volume of 121,000 shares, BP Prudhoe Bay Royalty Trust is the largest conventional oil and gas trust in the United States. Its assets are in the huge Prudhoe Bay Oil Field, the largest oil field in North America.

Oil and gas UITs, like BP Prudhoe Bay Royalty Trust, are functionally similar to other types of unit investment trust, such as those that invest in real estate or equities. Each trust is divided into individual units that are then priced and sold to investors. These units represent a proportional interest in all of the oil and gas assets held by the trust, and each has a pre-determined maturity date on which all the assets held in the trust are sold, and the money that is realized from the sale is distributed to the unit holders.

Unlike REITs or stock unit trusts, oil and gas UITs are invested directly into production or exploration, and the income and expenses realized from the production are passed through the trust.

One risk of UIT investments is that the basket of assets held by the trust does not change so in volatile markets there is no manager that is also to change the underlying investments or minimize the losses.  With the falling price of oil, oil and gas UIT investments have been hammered, with many suffering losses in excess of 50%.

The White Law Group is investigating the liability that brokerage firms may have for recommending the BP Prudhoe Bay Royalty UIT.  Brokerage firms have an obligation to perform adequate due diligence on any investments they recommend.  Additionally, brokerage firms are required to ensure that all recommendation made are suitable for the investor in light of the investor’s age, investment experience, investment objectives, net worth, and income.

If it can be determined that the brokerage firm failed to perform adequate due diligence or recommended an investment unsuitably, the firm can be held responsible for any resulting losses in a FINRA arbitration claim.

If you invested in BP Prudhoe Bay Royalty UIT and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 312/238-9650 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 firm, visit http://www.whitesecuritieslaw.com.

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