December 20, 2016 Comments (0) Current Investigations

Blue Ridge Investment Losses

(Last Updated On: January 11, 2017)

Have you suffered losses investing in 2011-C Two Well Drilling Program, LP or another Blue Ridge investment? If so, The White Law Group may be able to help you recovery your losses by filing a FINRA arbitration suit against the brokerage firm that sold you the investment.

On October 10, 2016, the State of California Department of Business Oversight issued a Desist and Refrain Order against Source Capital Group, Inc for alleged misrepresentations.

According to the Order, Blue Ridge is the “managing general partner” of the following limited partnership drilling programs:

2011-C Two Well Drilling Program, L.P.,
2010/2011 Year End Drilling Program, L.P.,
2011 Year End Drilling Program, L.P.,
2012 Belmont Drilling Program, L.P.,
2012 Galveston Bay Drilling Program, L.P.

Beginning in September 2010, in connection with the offer and/or sale of these securities, Respondents allegedly made misrepresentations of material facts. These misrepresentations and omissions were the following: (a) Respondents allegedly represented to the investor that he would receive profits of at least sixteen percent (16%) annually on his investment. (b) Respondents also allegedly represented to the investor that he would receive his entire principal investment amount in return at any time he requested it. According to the Order, an investor allegedly requested that Respondents return his investment amount on multiple occasions. To date, the investor has not received his investment principal or a profitable return on his investment principal.

The trouble with alternative investment products, like 2011-C Two Well Drilling Program, LP, is that they involve a high degree of risk and are typically sold as unregistered securities which lack the same regulatory oversight as more traditional investment products like stocks or bonds.  An additional risk inherent to these Blue Ridge offerings is also the general risk that comes with the energy market – a market that has seen enormous losses over the last few years due to the declining cost of oil and other energy commodities.

In addition, Reg D private placements are typically sold by brokerage firms in exchange for a large up front commission, usually between 7-10%, as well as additional “due diligence fees” that can range from 1-3%.

The White Law Group is investigating the liability that brokerage firms may have for improperly selling oil and gas private placements such as 2011-C Two Well Drilling Program, LP.

Broker dealers that sell alternative investments are required to perform adequate due diligence on all investment recommendations to ensure that each investment is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.

However, another problem with Reg D private placements is that the high sales commission and due diligence fees the brokers earn for selling such products sometimes can provide brokers with an enormous incentive to push the product to unsuspecting investors who do not fully understand the risks of these types of investments or to outright misrepresentation the basic features of the products – usually focusing on the income potential and tax benefits while downplaying the risks.

Fortunately, FINRA does provide for an arbitration forum for investors to resolve such disputes and if a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be liable for investment losses in a FINRA arbitration claim.

To determine whether you may be able to recover investment losses incurred as a result of your purchase of 2011-C Two Well Drilling Program, LP or another Blue Ridge private placement investment, please contact The White Law Group at 1-888-637-5510 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. The firm represents investors throughout the country in claims against their brokerage firm.

For more information on the firm and its representation of investors, visit www.WhiteSecuritiesLaw.com.