Stock broker Robert Pniewski of Grand Rapids, Michigan was recently involved in a legal dispute with a customer who alleged that Pniewski’s recommendation to purchase shares in Emerge Energy Services LP was unsuitable due to the level of risk involved and because the recommendation left the customer’s portfolio over-concentrated in one stock. The customer, who had realized loss in the amount of $78,274.17, eventually settled the case for approximately $70,000.
According to its website, Emerge Energy Services LP (EMES) is a growth-oriented limited partnership engaged in the businesses of mining, producing, and distributing silica sand, a key input for the hydraulic fracturing of oil and natural gas wells. Since August 2014, the stock has plummeted from $144 per share to $2.12 (as of the last day of trading).
Growth-oriented commodity-producing companies like EMES tend to be higher risk investments. In the case of EMES, this is confirmed by online resources that show that the stock has a Beta of 2.19 (Reuters), and a 3-year Beta of 3.69 (Yahoo Finance), both of which measures indicate that the stock is considerably riskier than the average stock market investment.
Financial advisors have a duty to recommend suitable investments and investment strategies to their clients. A recommendation is only suitable if it comports with the client’s investment objectives, risk tolerance, investment experience, investment time horizon, liquidity needs, and income needs. The duty to recommend suitable investments cannot be disclaimed through risk disclosures or waivers.
If you have suffered damages due to the unsuitable investment recommendations of Robert Pniewski and/or Robert W. Baird & Company, we may be able to assist you in recovering some or all of your losses. For a free no-obligation consultation, please contact us toll free at 1-888 607 4819 or send us an email through our “Contact” page.