Investor Lawyers Blog
Investors who have suffered losses due to the recommendation of a stockbroker or financial advisor to invest in the hedge fund Astenbeck Master Commodities Fund II (“Astenbeck II”) may be able to recover losses through FINRA arbitration if the investment recommendation was unsuitable, or the nature of the investment was misrepresented by the advisor.
According to reports by Bloomberg, Astenbeck II posted large losses through the first half of 2017. In fact, in June 2017 alone, the hedge fund plummeted nearly 30% as reported by Bloomberg. Consequently, Astenbeck Capital Management decided to pull the plug and shut down Astenbeck II, the main hedge fund vehicle under the Astenbeck Capital Management umbrella.
Astenbeck II appears to have suffered losses part due to a heavy “long” position in crude oil. Unfortunately for investors, crude oil has not recovered from the prices of over $100 per barrel of crude as seen in 2014. In fact, as of early October 2017, the price of a barrel of West Texas Intermediate (“WTI”) crude oil continues to hover around $50.
Non-conventional investments and private placements such as hedge funds present substantial risks that render them unsuitable for many investors. In particular, hedge funds investing in oil and gas and energy markets are very high-risk in nature, and therefore, require any broker to conduct reasonable due diligence before recommending such an investment in the first instance to a client. Moreover, pursuant to applicable securities laws and FINRA rules and regulations, a broker is required to conduct an appropriate suitability analysis before recommending a risky investment vehicle to his or her client, an analysis which involves reviewing the investor’s stated investment objectives and corresponding risk profile.
The attorneys at Law Office of Christopher J. Gray possess significant experience in handling disputes, including FINRA arbitration claims, on behalf of investors in energy products, hedge funds and private placements. Investors who invested in Astenbeck II or a similar oil and gas investment vehicle may contact our office at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.