Unfortunately, we have spoken to many investors who have seen their retirement savings dwindle due to inappropriate investments in oil and gas master limited partnerships. If you were recommended Natural Resource Partners LP by a financial advisor, you may be able to recover your investment losses as explained below.
A master limited partnership is a partnership that is usually involved in oil and gas production or mining. Master limited partnerships are usually recommended to investors for their relative tax benefits and high income. To qualify for these tax benefits, MLPs must earn at least 90% of their income from “qualified sources” such as oil, gas and petroleum products.
However, the saying “high risk high reward” applies here. Many investors are unaware of the risks associated with master limited partnerships, primarily because these investments are complex and unfamiliar. Accordingly, some investors unnecessarily and unknowingly exposed all or part of their life savings to significant losses.
Why are Master Limited Partnerships Risky?
Master limited partnerships are risky because trading commodities (oil and gas) and the mining of commodities, in general, are risky businesses. The major risk factors associated with master limited partnerships include:
- Master limited partnerships are essentially a way to gain exposure to the price of oil or natural gas. As a result, any fluctuations in commodity prices will affect trust income and therefore share prices.
- High fees that erode shareholder value.
- High debt loads increase financing risk and make the asset class more sensitive to rising rates.
- No guarantee of income or principal protection during a commodity price slump.
These risks may not have been properly explained or disclosed to you. So what can you do?
How Investors May Recover Investment Losses in Natural Resource Partners LP
Investors who were inappropriately recommended risky oil and gas investments like Natural Resource Partners LP may be eligible to bring claims against their financial advisor and/or brokerage firm. Some investors we have spoken with complain that their financial advisor did not explain the investment. Other investors claim that their financial advisor recommended too high a concentration of oil and gas investments in their accounts.
If this sounds familiar, then you may be able to sue your financial advisor and/or brokerage firm to recover the losses you sustained as a result of investing in Natural Resource Partners LP.
Lufrano Law, LLC is a national securities litigation firm and has experience representing investors who have investment disputes with financial advisors, brokers and broker-dealers. We may be able to help you recover your losses through a FINRA arbitration claim against the brokerage firm that recommended the investment. We offer free consultations to all investors. Please contact one of our attorneys at (800) 627-2179 to schedule a free consultation or complete our free case evaluator.