new York Based Oil & Gas Royalty Trusts Lawyers
We Also Serve Clients Throughout the United States
Royalty trusts refer to investments for people who want income that rises together with commodity prices. Investors are recommended royalty trusts typically because they can earn high yields as they get bigger distributions when energy prices rise in relation to the value of natural resources including oil, gas or mineral production.
They are a form of pass-through entity where they are structured comparably to master limited partnerships (MLPs) and real estate investment trusts (REITs) that avoids having to pay for federal income tax if cash distributions of profits are given to unit holders, usually monthly. Without any physical operations, management and employees, royalty trusts run via financing vehicles by banks that trade like stocks while an external company mines the resources and pays the royalties to the trust.
The Nature of Royalty Trusts
The value of royalty trusts as well as their distributions are, to a huge extent, directly correlated to the prices of the commodity selected, which is considered an unstable investment where the value cannot be accurately predicted. With this, some investors may not be aware that royalty trusts are almost as good as purely gambling on commodity prices. Finally, there are only a select number of resources considered for royalty trusts and once the commodity is depleted, the amount of distributions will decrease and over time become zero, leaving the royalty trust to be a worthless investment.
Ethical and well-informed brokers and financial advisors are responsible for making sure that the commodity recommended to their clients for investments are appropriate for them. They also must ensure that they conduct due diligence on the company before sharing information with their clients.
Discuss Your Oil & Gas Royalty Trust Case With Our Attorneys Today
If you have suffered financial losses as an investor for oil and gas royalty funds, you may attempt to recover your losses through securities arbitration. This is an alternative to traditional litigation and a legal process where disputes between clients and brokerage firms are resolved in arbitration and not a courthouse. Taken place before the Finance Industry Regulatory Authority (FINRA), arbitrators decide the case instead of juries or judges against the brokerage firm. The rules of evidence are also more flexible in arbitration as they also consider evidence in arbitration that might have not been admissible in court. It is important to engage a lawyer who is very familiar with FINRA and its procedures as well as their rules and regulations. This is due to the complexity and complications of the cases with FINRA.
Weltz Law understands that for many of our clients, the investments lost contains a huge amount of savings over a long time and represents a huge financial setback. Our experienced and knowledgeable attorneys can help you assess your case to the best of their ability to fight for the compensation you deserve.
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