Losses In Master Limited Partnerships

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Losses In Master Limited Partnerships

The Frankowski Firm, LLC is investigating brokers and their brokerage firms who have recommended and sold investors stock in a Master Limited Partnerships. If you have suffered losses in any of the folling or similar investments, you may have a legal claim to recover those losses:

  • Breitburn Energy Partners (BBEP)
  • Plains All American Pipeline (PAA)
  • Warren Resources (WRES)
  • American Midstream Partners (AMID)
  • Magnum Hunter Resources (MHRCQ)
  • Cushing MLO Total Return (SRV)
  • Goldman Sachs MLP Energy Renaissance Fund (GER)
  • Energy Transfer Patterns (ETP)
  • Enbridge Energy Partners (EEP)
  • Nustar Engery (NS)
  • TC Pipelines (TCP)
  • Oneok Partners (OKS)
  • Enlink Midstream Partners (ENLK)
  • Martin Midstream Partners (MMLP)
  • Genesis Energy (GEL)
  • Kinder Morgan (KMI)
  • Linn Energy (LINE)
  • Chesapeake Energy (CHK)
  • Energy Transfer Equity (ETE)
  • Williams Cos (WMB)
Brokers often market Master Limited Partnerships as low risk, higher yield securities. However, Master Limited Partnerships have certain inherent risks that brokers often fail to disclose to investors:

  1. MLPs are extremely volatile. Most MLPs invest in the natural resources infrastructure. This is usually a risky area, given the swings in energy and commodity prices. These investments fluctuate greatly with the price of oil and gas.
  2. MLP distributions grow at a quicker rate during their first two years in order to attract positive research reports from Wall Street analysts. These inflated distributions and positive reports drive the stock price higher despite the fact that the long term yield of these investments are speculative and unknown.
  3. MLPs tend to be highly illiquid and require long holding periods. This can render an investment unsuitable for a particular investor, if they are at an age or place in their lives where access to cash is important, or if the investor actually told their financial professional that liquidity was important to them.
  4. Oil and gas limited partnerships, like other alternative investments, also tend to be high-commission products. This gives brokers an incentive to recommend and sell to unsuspecting investors without making the necessary suitability analysis required of them by Financial Industry Regulatory Authority (FINRA) Rules and applicable securities laws.
  5. The structure of a MLP mandates that most of the income be distributed to investors. This often forces MLPs to borrow funds to be able to pay dividends. The added risk is the leverage created by the MLP borrowing funds, especially in downturns in the economy.
If you or someone you know has lost money as a result of investing in any of these or other products, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.

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