Have you suffered losses investing in Chesapeake Granite Wash Trust (NYSE: CHKR)? 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.
Chesapeake Granite Wash Trust owns royalty interests in oil and natural gas properties located in the Colony Granite Wash play in Washita County in the Anadarko Basin of western Oklahoma. The company has royalty interests in 69 horizontal producing wells and 118 horizontal development wells, and in approximately 28,700 net acres of area. As of December 31, 2013, its reserve estimates for the royalty interests included 12,640 thousand barrels of oil equivalent (boe) of proved developed reserves and 5,862 thousand boe of proved undeveloped reserves. The company was founded in 2011 and is based in Austin, Texas.
Oil and gas UITs, like Chesapeake Granite Wash 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 Chesapeake Granite Wash Trust. 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 Chesapeake Granite Wash Trust 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, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee. For more information on the firm, visit https://www.whitesecuritieslaw.com.