Tag Archives: oil and gas private placement

How to Recover Losses on Reef Oil and Gas Fund Investments

April 2018-Richardson, TX

Reef Securities Inc. and its owner and president Frank Mauceli were sanctioned by FINRA on April 11, 2018, for failing to timely notify investors in an Oil and Gas Drilling and Income Fund L.P. , sold in 2014, of revisions to an offering prospectus and of the investors’ rights to rescind his or her investment.

In addition Reef was sanctioned for advertising violations in another Reef offering. According to the FINRA sanction the subject advertising communications:

“failed to provide a balanced presentation or a sound basis for evaluating the investments being promoted, contained misleading and unwarranted claims, and, in addition, made prohibited profit projections.”

FINRA noted the following as being inconsistent and unwarranted statements in the subject advertising materials:

  • a 3 year profit range of 45%-75% in one communication vs a 35-45% range in another communication
  • a divest period of 24-36 months in one communication vs. 3-5 years in another communication
  • prohibited investor performance projections such as “Total Anticipated Profit 45%-75%”

Reef Securities was censured and fined $40,000. Mauceli was fined $5,000 and suspended 4 months from association from any FINRA member firm in all principal capacities. FINRA AWC2015043469001

Reef Oil and Gas, an affiliate of Reef Securities, engages in the developing, exploiting and producing oil and natural gas.

A partial list of recent Reef oil and gas offerings we have been investigating:

  • Reef 2015 Oil & Gas Opportunity Fund
  • Reef 2015 Income Fund
  • Reef Bakken Bear Cat Drilling Fund
  • Reef 2012-A Private Drilling Fund
  • Reef 2011 Private Drilling Fund
  • Reef 2010 Drilling Fund
  • Reef 2009 Drilling Fund
  • Reef 2007-2009 Drilling Program
  • Reef Oil & Gas Drilling & Income Fund
  • Reef Oil & Gas Income & Development Fund III
  • Reef Oil & Gas Income & Development Fund IV

Reef Oil and Gas investments were sold by many brokerage firms, including Reef Securities. These investments can be unsuitable for certain individuals, including the elderly and retired. If you have losses on an investment in one of the Reef Oil and Gas offerings, call for a no charge consultation to discuss your options.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

How to Recover Damages for Losses on Oil and Gas Investments Purchased from PTX Securities

Investors suffering losses on oil and gas investments purchased from PTX Securities of Plano, Texas, may be able to recover damages through FINRA arbitration.

PTX Securities (fka Balanced FInancial Securities) was sanctioned by FINRA in April 2016 for failure to perform adequate due diligence in connection with the sale of two private placement oil and gas offerings. See this for details on the sanction.

Call for a no charge consultation to learn about your options.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Oil & Gas Private Placement Investments A Bad Bet Per Reuters

November 11, 2014-  A recent article by Emily Flitter of Reuters warns retirees to take a very hard look at oil and gas offerings before risking any of the family nest egg.

Atlas Resources, LLC is one of the investments analyzed by Reuters. The economics of the deal suggest that the heavy upfront burden of fees and payments to related entities may make it difficult for investors to achieve any meaningful returns. Here is how Reuter’s dissects the deal:

  • Atlas Resources, LLC hopes to raise $300 million before the end of 2014 and will put in $145 million of its own capital to fund Atlas Resources Series 34-2014 LP
  • Up to $45 million will be paid to an affiliate, Anthem Securities to cover commissions to selling agents
  • Up to $39 million will be used to buy leases from another Atlas affiliate
  • Atlas-affiliated suppliers may also get part of $53 million set aside for drilling equipment
  • $8 million of Atlas’ purported investment is not an investment  but rather a 15% markup on estimated equipment costs.

Reuters estimates that Atlas’s $145 million investment exposure is reduced by at least 40% after considering payments to affiliates and markups. Atlas is entitled to 33% of any revenue produced. Historically over half of the 43 private placements issued by Atlas over the past 3 years have either just barely broken even or lost money for investors. In 29 of the deals, Atlas did better than the investors.

Reuters also looked at Reef Oil & Gas Partners of Richardson, Texas, and found that of 34 deals since 1996, only 12 have paid more cash to investors than they contributed. In 31 smaller deals issued between 1996 and 2010 of the $146 million raised from investors only $55 million was returned.

Atlas warns in its offering memorandum “These securities are speculative and involve a high degree of risk. You should purchase these securities only if you can afford a complete loss of your investment.” However many investors are told to disregard those warnings by the selling brokers, who minimizes the risk to gain the sale.

Tax benefits are often touted as a reason to invest in these deals even though the bulk of retirees generally pay tax at a very low rate.

Discovery Resources & Development LLC of Frisco, Texas and Black Diamond Energy Inc of Buffalo, Wyoming also sold oil and gas private placements over the recent years.

If you invested in oil and gas private placements and believe that the nature of the risk was minimized or misrepresented, you may be able to recover damages. Contact us to learn more.

Rex Securities Law provides nationwide representation to investors seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Rex Securities Law

561 391 1900

SEC Issues Investor Bulletin on Private Placement Investments

September 24, 2014

THe U.S. Securities Exchange Commission (SEC) Office of Investor Education and Advocacy has issued an Investor Bulletin to help educate investors considering investing in private placements, which are securities that are not registered and also known as
“Reg. D Offerings”.

These investments, which typically pay high commissions to the brokerage firm,  (oil and gas partnerships are often sold in private placement offerings), are often touted as an exclusive opportunity and the security being offered may be stock, a limited partnership, an interest in a limited liability company, a note or a bond. The SEC warns:

“Keep in mind that private placements can be very risky and any investment may be difficulty, if not virtually impossible to sell.”

Most private placements may only be sold to Accredited Investors,  which is defined as a individual who:

  • has earned income that exceeded $200,000 ($300,000 if combined with spouse) in each of the last two years, and reasonably expects the same for the current year, OR
  • has a net worth of over $1 million, either alone or together with spouse. This net worth calculation excludes the value of the primary residence and any loans secured by the residence.

The Investor Alert contains much more detail about risk factors investors should take into account if considering a private placement investment.

Rex Securities Law provides nationwide representation to investors seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.  Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Rex Securities Law

561 391 1900

Source Capital Group Sanctioned $100K Over Oil and Gas Offerings

In July 2014 the Financial Industry Regulatory Authority (FINRA) sanctioned Source Capital Group, Inc. $100,000 to resolve allegations that the firm sold investments in an entity without adequately disclosing material information to investors and in order to solicit investments in private offerings of oil and gas securities, the firm made exaggerated promises to customers.

In FINRA Letter of Acceptance, Waiver and Consent #2008011771602 , which Source Capital accepted without admitting or denying the findings, FINRA found:

  • Between October 2006 and December 2012, a Source Capital Group branch office in Bowling Green, Kentucky sold interests in Blue Ridge Securities, an oil and gas investment without adequately disclosing the compensation arrangement between Blue Ridge and Source Caital brokers
  • Source Capital brokers solicited investors in Argyle Securities, another oil and gas investment, using emails that made unfounded promises regarding the performance of Argyle Securities.
  • Individuals involved were Kevin Cline who was manager of one of the Bowling Green branches ,  J.R. Burr who was manager of a second branch and Vincent Christopher and Thomas Gilleland , brokers working for Source Capital in Bowling Green.

Source Capital Group was formed in 1994 and has its main office in Westport, Connecticut. They currently have regional offices located in:

  • Scottsdale, AZ
  • West Hartford CT
  • Pearl City, Hawaii
  • Bowling Green, KY
  • Morristown, NJ
  • New York City

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.

Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870