Investor Warning: Master Limited Partnerships (MLPs) and Investment Losses

AdobeStock_123495998-1-300x197In the beginning of 2018, investors who were told by their broker that Master Limited Partnerships (MLPs) in oil and gas were going to bounce back, realize this was just another in a long line of lies told to them. MLPs have had a history of being high-risk and highly illiquid investments, due to the downturn of oil prices in recent years. MLPs are a type of business venture that exists in the form of a publicly traded limited partnership. Most MLPs operate in the energy industry, providing and managing resources. Energy, oil and gas stocks are not suitable for every investor, especially those who are elderly, have limited investment sophistication and/or net worth, and wish to have low risk. A broker has a duty to only recommend and sell those investments that are suitable for his clients, and he does so by doing his due diligence on every investment, and taking the aforementioned factors into account. If he does not, his brokerage firm may be liable for losses, because the firm has a duty to reasonably supervise its employees in order to prevent them from violating securities laws and internal firm rules. Some of the MLPs to watch out for include:
Hi-Crush Partners LP (HCLP)
SunChoke Energy Partners LP (SXCP)
Natural Resource Partners LP (NRP)
Emerge Energy Services (EMES)
American Midstream Partners (AMID)
CONE Midstream Partners LP (CNNX)
USD Partners LP (USDP)
JP Energy Partners (JPEP)
CNX Coal Resources LP (CNXC)
Mid-Con Energy Partners LP (MCEP)

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