Arbitration Claims Projected to Spike as Oil & Gas Plummet
From the Desk of Jim Eccleston at Eccleston Law LLC:
With the stagnant, below-average performance of energy sectors such as oil and gas, many investors hold investments that have lost most of their value. As a result, there is an expected wave of arbitration claims coming in 2016 for advisers who investors claim put too much of their money into energy investments that imploded as U.S. oil prices collapsed.
Investors across the country lost millions, some of which was set aside for retirement, forcing retirees and close-to-retirees to seriously reconsider their futures. The consistency of losses, weighted heavily in retirement savings, has led many in search of answers. Investors argue that brokers, who made oversized bets with their retirement money, are to blame.
The high yield default rate is expected to increase in 2016 to 20%, more than doubling the 7% rate in 2015 according to Fitch Ratings. Additionally, the oil exploration and production 12-month trailing default rate is expected to reach at least 30% by the end of 2016.
Mr. Soreide confirms that it’s difficult to estimate the number of claims to be brought against brokers and advisers, but he is confident that it is likely that more are on the way. In many cases, investors do not become aware of their losses until year-end statements are sent to them from their broker. The end of 2016, then, could see a large spike in arbitration claims.
The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.
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