Published On: April 20, 2016

Recently, UBS stripped the majority of the coal companies it covers, including Walter Energy (WLT), and Alpha Natural Resources (ANR) of their Buy ratings. Other impacted stocks include Consol Energy (CNX), Peabody Energy (BTU) and Arch Coal (ACI). The downgrade comes at a time when coal companies are cutting capital spending to maintenance levels and are primarily focused on preserving/enhancing liquidity. Investors are not encouraged to buy coal-levered names such as Walter Energy, Alpha Natural Resources or Arch Coal because of these companies, Walter Energy and Alpha Natural Resources especially, taking the biggest hits. Walter Energy filed for bankruptcy on July 15th, 2015. Shares of Consol Energy and Walter Energy have plunged significantly since then. Investments like coal, and oil and gas, are particularly risky for investors, with the prices of these fuels declining at a rapid rate.

Paul W. Murans, a current broker with UBS in Indianapolis, Indiana, allegedly recommended and sold Walter Energy products to at least one client in May and June of 2012 in an IRA account. The client suffered a total loss on the investment with the coal product. Murans allegedly told the client that the account was considered to be a growth account and that there was no possibility of taking a loss from it. The client stated that she wanted steady growth, income and safety. The investment was not suitable for the client. Murans was registered with UBS Painewebber in Weehawken, New Jersey from October 2000 until April 2003 and is currently registered with UBS in Indianapolis and has been since March 2011.

If you were recommended these investments by Murans, another UBS broker, or any other broker, and suffered losses, please call our Chicago-based securities law firm today to speak to an attorney. Firms such as UBS can be sued in the Financial Industry Regulatory Authority (FINRA) for allowing their brokers to recommend and sell securities such as coal investments with Walter Energy. A broker has a duty to recommend only those investments that are suitable for investors and must take into account an investor’s age, net worth, portfolio objectives and investment sophistication when doing so.


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