Silver Law Group Investigates Morgan Stanley's Recommendations of Cobalt International Energy and Seadrill Ltd
23 May 2015 - 3:08AM
Silver Law Group (www.silverlaw.com) is investigating
possible customer claims of unsuitability and over-concentration
relating to Morgan Stanley Smith Barney's (Morgan Stanley)
recommendations of Cobalt International Energy and Seadrill Ltd.
The share prices of Cobalt and Seadrill have plummeted recently
causing substantial monetary losses to holders of these stocks.
Our investigation focuses on whether Morgan Stanley's financial
advisors made unsuitable investment recommendations when soliciting
Cobalt and Seadrill to their retail customers, and whether the
recommendations caused an inappropriate and dangerous
over-concentration of these stocks in the customer's portfolio.
Investors have alleged that financial advisors urged investors
to put a substantial part of their portfolio in these
investments. However, it may become unsuitable if it
comprises a substantial percentage of the portfolio. This is called
over-concentration and it carries with it a significant risk of
loss. Overconcentration frequently involves one particular stock,
an over-weight in a particular industry or sector or the purchase
of an alternative investment or private placement. Stock brokers
have an obligation under the law and securities industry rules to
make only suitable and appropriate recommendations based upon the
customer's investment objectives, risk tolerance, time horizon and
other factors when soliciting an investment.
Cobalt International Energy, which Morgan Stanley followed and
recommended institutionally, and Seadrill Ltd, of which Morgan
Stanley was a large institutional owner of its stock totaling over
14 million shares as of September 30, 2014, according to
Morningstar -- are both in the oil and gas sector. Accordingly,
those Morgan Stanley customers who were sold Cobalt or Seadrill, or
both, in amounts that alone or cumulatively exceed 25% of their
overall portfolio may have a claim to recover their investment
losses on the basis of an unsuitable overconcentration.
If you are a Morgan Stanley customer who has sustained losses in
either Cobalt or Seadrill or other energy stocks and wish to
discuss your situation and the potential for the recovery of your
investment losses through FINRA arbitration, or you have
information concerning this investigation, please contact Scott
Silver, Esq. for a confidential, no cost consultation: toll-free
at: 800-975-4345 or e-mail at: ssilver@silverlaw.com.