Mewbourne Energy Partners 16-A LP Investment Losses
Have you suffered investment losses in Mewbourne Energy Partners 16-A LP? If so, The White Law Group may be able to help you recover your losses by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.
According to their website, Mewbourne Oil Company develops oil and natural gas prospects, acquires leasehold interests, and serves as the operator in the drilling, completion and production of oil and natural gas wells. The company has focused its efforts on two of this country’s most prolific producing regions, the Anadarko and Permian Basins.
Many oil and gas LPs have high expense ratios, and due to the decline in the overall health of the oil and gas market, are suffering. Some are on the brink of default, or worse yet, bankruptcy. Such an outcome is extreme, but not unforeseen. It only highlights the unsuitability of these investments for most retail investors – particularly in large concentrations.
Mewbourne Oil is investing more than $6 million in a new Permian Basin headquarters despite an oil and gas downtown. Mewbourne Oil started construction this summer on a 32,000-square-foot office facility in Hobbs.
The company often raises money for investments through Reg D private placement offerings like the company did for Mewbourne Energy Partners 16-A LP. These Reg D private placements are then 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%.
Trouble with Alternative Investment Products
The trouble with alternative investment products, like Mewbourne Energy Partners 16-A 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. Additionally, investments in the energy market are risky market that has seen enormous losses over the last few years due to the declining cost of oil and other energy commodities.
Broker dealers that sell alternative investments are required to perform adequate due diligence on all investment recommendations. They must ensure that each investment recommendation that is made is suitable for the investor. Suitability considerations include the investor’s age, risk tolerance, net worth, financial needs, and investment experience.
Another problem with Reg D private placements is that the high sales commissions and due diligence fees. Brokers have enormous incentive to push the product to unsuspecting investors who do not fully understand the risks. They may misrepresent the basic features of the products – by 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. 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 found liable for investment losses in a FINRA arbitration claim.
Recovery of Investment Losses
If you have suffered losses investing in Mewbourne Energy Partners 16-A LP or another Reg D private placement investment, please contact The White Law Group at 1-888-637-5510 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. 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.