April 10, 2017 Comments (0) Current Investigations

Concerned about Investment losses in Gevo, Inc.?

Gevo, Inc.
(Last Updated On: April 17, 2017)

Recovery of Investment Losses in Gevo, Inc.

Have you suffered losses investing in Gevo, Inc.? If so, The White Law Group may be able to help you recover your losses by filing a FINRA Arbitration claim against the brokerage firm that sold you the investment.

Gevo is a leading renewable chemicals and advanced biofuels company located in Colorado, according to their website. They claim to have developed bio-based alternatives to petroleum-based products using a combination of synthetic biology and chemistry.

In February we told you that shares in Gevo, Inc. dropped more than 31 percent during one day’s trading and fell another 14 percent the following day. The company claimed it would issue more stock to raise money but also issued a warning about its future.

According to SEC filings, Gevo stated the company expects to incur future net losses as they fund development and commercialization of their product candidates. According to the filings, Gevo Inc. has been financing operations primarily with proceeds from multiple sales of equity and debt securities, borrowings under debt facilities and product sales.

They also admitted the possibility of filing for bankruptcy. In the meantime, the intentions are to fund future operations through additional private and/or public offerings of debt or equity securities.

Investor Update: Fourth quarter 2016 financial results

* Q4 adjusted non-GAAP loss per share $1.14

* Q4 loss per share $0.33

* Q4 revenue $5.8 million versus $7.3 million

* Gevo  produced approximately 190,000 gallons of isobutanol during quarter at Gevo’s isobutanol production facility located in Luverne, Minnesota

The White Law Group continues to investigate the liability that brokerage firms may have for recommending investments in energy private placements such as Gevo, Inc.

According to SEC filings, it appears that Gevo Inc often raises money for investments through Reg D private placements. 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 Trouble with Private Placements

The trouble with alternative investment products, like Gevo Inc. offerings, 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 and bonds.

An additional risk inherent to Gevo Inc. offerings is also the general risk that comes with the energy market – a market that has seen enormous losses over the last few years.

Broker dealers that sell alternative investments are required to perform adequate due diligence on all investment recommendations. They must 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 unfortunate by product of Reg D private placements is that the high sales commission brokers earn for selling such products may provide some brokers with enough incentive to push the product to unsuspecting investors who do not fully understand the risks of these types of products.

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.

Also brokers can earn high commissions for selling Reg D private placements. This may drive them to push the product to unsuspecting investors who do not fully understand the risks of these types of products.

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.

Free Consultation

To determine whether you may be able to recover investment losses incurred as a result of your purchase of Gevo Inc. 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. For more information on the firm, visit www.WhiteSecuritiesLaw.com.