The Collapse of High Risk, High Yield Oil and Gas MLP Stocks

The Declining Price of Oil Collapses Oil and Gas MLP Market

Many of us have been rejoicing at the steep decline in gas and oil prices. After all, our daily experience of the drop in global oil prices following OPEC’s recent meeting has meant the cheapest prices at the pump in almost a decade. What a relief!

Photo by M. ozgur AKPOLAT/iStock / Getty Images

But not all of us are jumping for joy. Investors who purchased stock in high-yield oil companies that invest in gas and oil distribution, production, and delivery (also known as master limited partnerships or MLPs) are more likely to be tearing their hair out right about now. And with Goldman Sachs and other financial calling for oil prices to dip down into the low $40s per barrel deep into 2015, the outlook for oil MLP stocks just got worse…

Investor Lose Millions in High Yield, High Risk Oil and Gas MLPs

Investors who purchased MLPs on their own may be kicking themselves for taking a chance on these high-yield, high-risk stocks - and for not getting out before this sector collapsed a few weeks ago. But if you’re an investor who was recommended oil MLPs by your stockbroker or investment advisor, well - you may want to have a serious conversation with that person. By introducing an inappropriate amount of risk into your investment portfolio through oil and gas MLP stocks (or any other publicly or privately-traded security or product, for that matter), you may be able to pursue your losses due to bad advice through the FINRA (Financial Industry Regulatory Authority, the securities industry’s self-regulating body) arbitration process.

Brokers Must Uphold Suitability Standards While They Pursue Higher Returns

Registered brokers and advisors are held to high standards of suitability and fiduciary duty. Even as they aggressively pursue investment returns on your behalf (and fees on theirs), they must uphold those standards and always make sure that an investor’s portfolio is suitable for him or her. Suitability, moreover, must be an ongoing correlation between investor and investment. Investors’ financial situations can change year to year or even month to month; and of course, investments change daily. What may have been an appropriate investment or portfolio for you last year, may not be this year. Likewise, risk levels in individual investments can fluctuate enormously. For example, before the financial crisis of 2008-9, Bear Stearns was a very low risk, blue chip-type security. But as the financial crisis approached, that changed. Its ratings fell; its risk increased. Indeed, change is the only constant when it comes to the stock market. That’s what makes investing so exciting - and so risky.

If you or anyone you know has been the victim of broker misconduct or investment mismanagement due to oil and gas MLPs or any other product, please contact the securities attorneys of The Green Firm LLC immediately to discuss your legal rights by calling us toll-free 1-855-462-3330 or via email by clicking here.