Were you recommended oil and gas related investments like the Yorkville High Income Infrastructure MLP by Morgan Stanley financial advisor Steven Wurzer? If so, the losses you may have sustained might be recoverable on a contingency fee basis against Morgan Stanley. Brokers are required to make suitable recommendations based on the clients financial objectives, net worth, and other holdings. Unfortunately, the large payouts associated with oil and gas limited partnerships caused many brokers to recommend them even if the investment may not have been in the client’s best interest. Please call us for a legal evaluation as to whether Yorkville High Income Infrastructure MLP losses can be recovered.
Stoltmann Law Offices is interested in speaking to those investors who have invested in oil and gas and commodities related investments. Investors may be able to recover their losses by suing the brokerage firm of the broker who recommended these. Our law offices have been tracking a number of Master Limited Partnership (MLP) closed-end funds that have suffered significant losses. Among them is Kayne Anderson MLP (NYSE: KYN) which has $4.1 billion in assets. Over the past year, this fund has suffered a 57% loss.
Around 86% of the total MLP securities market can be attributed to energy and natural resource companies. Investors have lost over $20 billion in publicly traded oil funds in MLPs. Banks such as Citigroup, Barclays and Wells Fargo made an estimated $1.1 billion in fees for selling these products to investors. Many brokers have been hyping these MLP investments because of the commissions they provide for the brokers themselves, but the recommendation and the sale must be suitable for the investor for it to be considered legitimate. Please call us if you have questions about bringing a claim against your brokerage firm for the sale of MLPs. We may be able to help you recover your money on a contingency fee basis.
Many elderly or retired investors sustained massive losses in the Cushing Total Return Fund (Ticker: SRV). SRV is a publicly traded, non-diversified, closed-end management investment company. The Fund’s investment objective is to obtain a high after-tax total return by investing at least 80% of its net assets, plus any borrowings for investment purposes, in energy Master Limited Partnerships (MLPs). Unfortunately, many brokers concentrated a disproportionate amount of client assets in Cushing. This has caused a massive hole in the account statements of tens of thousands of investors. Many of these recommendations may have been unsuitble investment recommendations and in violation of FINRA’s Conduct Rules. FINRA Rule 2310 requires the representative to only make suitable recommendations and to deal fairly with customers. Brokers are required to take into consideration their clients age, financial resources, and investment objectives when making recommendations to clients. In these cases where Cushing was recommended to clients, some, or all, of the investment losses might be recoverable through the FINRA arbitration claims process. To learn if you can sue to recover investment losses in the Cushing Total Return Fund, please call our investment fraud law firm.
Stoltmann Law Offices continues to investigate master limited partnerships (MLPs) which are a type of publicly traded limited partnership that qualify for certain tax benefits. MLPs do not pay corporate income taxes on profits. Taxes are paid when the MLP distributes the money to the partners who report that income on their tax returns. This could create a problem for investors, when negotiations with creditors include debt forgiveness. Partners then are expected to pay income taxes on the forgiven debt. If you were sold an MLP investment, you may have a case against the brokerage firm from which you purchased it, because it has a duty to reasonably supervise its employees to make sure they only recommend and sell suitable investments based on their client’s net worth, age and investment objectives. Some of the MLPs include Linn Energy, Atlas America and Cushing Royalty.
What is a Master Limited Partnership? (MLP)
A master limited partnership is a limited partnership that is publicly traded on an exchange that combines the tax benefits of a limited partnership with the liquidity of publicly traded securities. There are two types of partners in this type of partnership: The limited partner is the person or group that provides the capital to the MLP and receives periodic income distributions from its cash flow and the general partner is the party responsible for managing the MLP’s affairs and receives compensation that is linked to the performance of the venture. To qualify for the tax benefit, 90% of an MLP’s income must come from activities in real estate, commodities or natural resources such as mining, timber or energy production.
Are MLPs Similar to REITs and How do they Differ?
Shares of Energy Tranfer Equity plunged after the company disclosed that it was making a change to the Chief Financial Officer of its general partner. Meanwhile, master limited partnerships (MLPs) and other peers were downgraded by research firm Robert W. Baird. MLPs are publicly traded partnerships that receive tax benefits and often own oil assets. The downgrade comes because of the bankruptcy of exploration and productions companies, fund outflows and macroeconomic conditions. Other companies that were downgraded include EnLink Midstream (ENLC) ONEOK Partners (OKS), Plains All American (PAA) and Plains GP Holdings. Thomas Long will replace Jamie Welch as CFO of Energy Transfer Equity. Long is currently the CFO of Energy Transfer Partners, LLC which owns Energy Transfer Partners, LP, another MLP. Please call our law offices is you have experienced losses in MLPs.
Stoltmann Law Offices is investigating master limited partnerships (MLPs). A master limited partnership is a type of limited partnership that is publicly traded. There are two types of partners in it: The limited partner is the person or group that provides the capital to the partnership and receives periodic income distributions from the MLP’s cash flow, and the general partner is the party responsible for managing the MLP’s affairs and receives compensation that is linked to the performance of the venture. It is publicly traded on an exchange and combines the tax benefits of a limited partnership with the liquidity of publicly traded securities. Many of them own pipelines, storage tanks and other cash-generating energy infrastructures and give almost all of their income to shareholders in the form of distributions. MLP’s can be very risky for investors, as they can be difficult to understand. Also, in order to grow, they must borrow money or issue new shares, and banks, not investors, earn fees on those transactions. MLP’s typically generate high rates of return, therefore are riskier investments.
Stoltmann Law Offices is investigating the following MLP’s:
Enterprise Products Partners LP (EPD)