A National Securities Arbitration & Investment Fraud Law Firm
Boca Raton, Florida – May 22, 2015 (GLOBE NEWSWIRE) – 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 (NYSE: CIE) and Seadrill Ltd (NYSE: SDRL). 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.