Articles Tagged with MLPs

Stoltmann Law Offices has brought arbitration claims against dozens of brokerage firms like Ameriprise Financial, Merrill Lynch, Morgan Stanley, Wells Fargo, and JP Morgan Securities involving the unsuitable recommendations for investors to invest in oil and gas related securities.  In 2014 and 2015, we represented dozens of investors against various firms involving Master Limited Partnerships, or MLPs, which are almost always related to the oil and gas industry.  Then, during a big drop in the price of oil, a lot of oil and gas companies went into bankruptcy, dragging a lot of investor money with them.  History is repeating itself.

The price of oil has completely tanked in the last month. Even before the COVID-19 pandemic, the price of oil was being pressured by a price war involving Saudi Arabia, Russia, and OPEC.  Combined with the broad-based ongoing market crash, oil and gas investments – which are inextricably linked to the price of oil – have suffered catastrophic losses.  There are some well-know names on this list:

Goldman Sachs MLP and Energy Renaissance Fund – GER: Year to Date has dropped from 4.37 to 0.68 per share

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)

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