November 23, 2015 Comments (0) Blog, Securities Fraud

Securities Fraud Investigation involving Magnum Hunter Resources

Noble Royalty Access Fund VII
(Last Updated On: February 14, 2017)

Concerned about investment losses in Magnum Hunter Resources?

The White Law Group continues to investigate the liability that brokerage firms may have for recommending investments in oil and gas companies, including Magnum Hunter Resources’ private placement offerings.

Magnum Hunter Resources Corporation is an independent oil and gas company engaged in the exploration for of crude oil, natural gas and natural gas liquids in the US and Canada.  The company was founded in 1997 and is based in Irving, Texas.

The company often raised money for investments through Reg D private placement offerings like the company did for Energy Hunter Partners 2011 A Ltd., Energy Hunter Partners 2013 A Drilling & Production Fund Ltd, and
Energy Hunter Partners 2012 A Drilling & Production Fund Ltd. These Reg D private placements are then typically sold by brokerage firms in exchange for a large up front commission, usually between 7-10%.

The prolonged decrease in oil and gas prices has led to a number of bankruptcy this year. According to BizJournals.com, “Magnum Hunter (NYSE:MHR) is taking steps to restructure itself. Options include filing for Chapter 11 bankruptcy and going private.”

Magnum Hunter Resources has shown signs of distress even prior to this report. In September, the company received a Wells Notice from the SEC after their average common stock price fell below $1.00 for thirty consecutive days ( learn more, here).

Update

Magnum Hunter Resources elected to file bankruptcy in December 2015.  It appears investors in the company have suffered large losses.  Fortunately, investors who purchased Magnum Hunter Resources at the recommendation of a financial advisor may have recourse.

Before recommending an investment, a broker-dealer has a fiduciary duty to adequately disclose the risks involved in the investment and to perform the necessary due diligence to determine whether the investment is suitable for the investor. Unfortunately, brokerage firms sometimes fail to perform the necessary due diligence prior to recommending them to their clients.  When they do, firms can be held responsible for the resulting losses in a FINRA arbitration claim.

If you have concerns regarding an investment in Magnum Hunter Resources and would like to speak with a securities attorney about your litigation options, please call The White Law Group at 888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.