Sonn Law Group is investigating claims related to Breitburn Energy Partners LP (NASDAQ:BBEP). Breitburn Energy Partners LP is a publicly traded, independent oil and gas master limited partnership. Breitburn Energy Partners has a 52 week low of $0.46 and a 52 week high of $6.87. During July 2014, BBEP was trading as high as $22.83. Sonn Law Group has learned that certain brokers at RBC, Oppenheimer, Wells Fargo, Merrill Lynch, Morgan Stanley and other firms actively were recommending Breitburn Energy for investors, including seniors and retirees, as a safe, income-producing investment.
Breitburn is structured as a master limited partnership (“MLP”), which is a tax-exempt, publicly trade company combining the tax benefits of a limited partnership with the liquidity of publicly traded securities. MLP’s such as Breitburn Energy, Linn Energy, Vanguard Natural Resources, and others are not required to pay a corporate income tax, so their tax liability is passed on to its owners in the form of a cash dividend (distribution). As a result, Breitburn and other MLPS offered high rates of distribution, which have become unsustainable given the extended drop in energy prices. Thus, investors have lost not only income, but also principal.
A broker must have reasonable grounds for each recommendation made to investors considering such factors as the customer’s other securities holdings, financial situation, and risk tolerance. In addition, before a firm offers a security to its customers, the firm must conduct due diligence, that is investigate the facts surrounding the security, to confirm that it is suitable for any customer of the firm. The suitability of an investment for a particular individual is at the center of the investment process and one of the key fiduciary duties owed by a firm and its broker to the customer. A firm may be held liable for its failure to recommend suitable investments to its customers.
If you invested in Breitburn Energy Partners, LP, and have experienced investment losses, please call us at 844-689-5754 or complete our “contact form.” Sonn Law Group is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies.