Investor Alert - Did You Invest in Breitburn Energy Partners LP? If so, You May Be Able to Recover Some or all of Your Losses
Did your broker recommend Breitburn Energy Partners, LP (NASDAQ: BBEP) for your brokerage account? Did your broker explain the risks of investing in energy companies before you made the purchase? Did you broker discuss with you the historic price volatility of commodities such as oil and gas and its impact on the performance of the energy sector?
If you invested in an energy company such as Breitburn, and you lost money, you may be able to recover your losses.
Breitburn was an independent oil and gas master limited partnership (“MLP”). A MLP is a type of limited partnership that combines the tax advantages of a limited partnership with the liquidity of a publicly traded security. Many oil and gas companies take the form of MLPs.
The oil and gas industry is generally considered one of the most volatile sectors in the United States. The price of a barrel of oil dropped significantly in 2014 and thereafter, resulting in turmoil in the oil and gas industry. In the case of Breitburn, its share price went from a high of $22 in August 2014 to a low of $0.31 in May 2016.
News reports indicate that Breitburn borrowed heavily to fund its oil and gas exploration ventures. However, it became increasingly more difficult to carry the debt load and maintain its operations as energy prices declined. Breitburn declared bankruptcy in May 2016 when its existing debt became too large to sustain.
There have been several customer arbitrations filed against various investment firms whose brokers sold Breitburn to their customers. Customers have alleged that the recommendation to purchase shares of Breitburn, given the risky nature of oil and gas investments, was unsuitable.
Additionally, there have been instances when clients were over concentrated in Breitburn and/or other oil and gas MLPs and losses were incurred.
If you have questions or concerns regarding the handling of your brokerage account, contact the experienced securities arbitration attorneys at Lubiner, Schmidt & Palumbo for a free consultation and account review.