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Worst May Be Yet To Come For Energy MLPs

Investors in energy-focused master limited partnerships could be understood crying for mercy. The sector rebounded late last week, but the midstream benchmark Alerian MLP index is still down a brutal 16% in January, and 46% for the past year. The problem here, as with global markets, is falling crude-oil prices. In good times, MLPs do not correlate with oil prices, since they mostly earn revenue from long-term contracts based on volumes of gas and oil they transport, but in bad times, they do. U.S. crude bounced on Thursday and Friday to $32 a barrel from a low near $27, but there is no denying that oil is likely to stay lower for longer. On Friday, Moody’s put 122 energy companies on review for downgrades, citing “a prolonged period of oversupply that will continue to significantly stress the credit profiles of companies in the oil-and-gas sector.” Moody’s sees oil at an average price of $33 a barrel in 2016 and $38 [...]

By |January 27th, 2016|Press Releases & News|
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Rapid Price Decline Closes Two Leveraged MLP ETNs

Declining oil prices have victimized two leveraged exchange traded notes ("ETNs") tracking master limited partnerships ("MLPs"). UBS Investment Bank announced the closing of ETRACS 2xMonthly Leveraged Long Alerian MLP Infrastructure Index ETN (NYSEArca: MLPL) and ETRACS 2x Monthly Leveraged S&P MLP Index (NYSEArca: MLPV). MLPV “will be mandatorily redeemed in accordance with the terms of the Securities as a result of the occurrence of an Acceleration Event, triggered as a result of the intraday indicative value of the Securities being equal to or less than $5.00 on January 20, 2016,” said UBS in a statement. Previously popular income-generating asset classes, MLPs and sector-related exchange trade products have collapsed together with oil and natural gas prices last year, a theme that has extended through this year. Investors are concerned that the traditionally attractive dividend-paying asset would no longer be able to maintain its steady payouts as U.S. oil output starts to drop  after the massive decline in crude prices. In the [...]

By |January 26th, 2016|Press Releases & News|
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Risks Associated With Investing In Master Limited Partnerships

Master limited partnerships ("MLPs") are complex investment vehicles that have become massively popular in the past few years during the low interest rate environment. A MLP is a publicly traded limited partnership with two types of partners: the general partner, who is responsible for managing the MLP and is compensated for performance, and the limited partner, the investor who provides the capital to the MLP and receives periodic income distributions. Unlike most partnerships, shares of MLPs can be bought or sold on a stock exchange. Just like any partnership, the problem with being a limited partner is that such a partner has no role in the management of MLP. Unfortunately, MLPs can be very risky investments, as they fluctuate greatly with the price of oil and gas. Usually reserved for sophisticated and high-net-worth investors, these investments are not suitable for the average investor. However, a number of financial advisors sell them to their clients anyway, without fully disclosing the potentially catastrophic [...]

By |January 25th, 2016|FINRA, Press Releases & News|
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Futures Trader Pays $260,000 In Restitution For Securities Fraud

Robert Scott Wiens of Lakewood, Colorado, a director a futures trading firm RXM Holdings Ltd., was sentenced last week to a year in prison and paid more than a quarter-million in restitution for securities fraud. Wiens, who pleaded guilty in October, paid $260,000 of $734,140 in court-ordered victim restitution, according to the Colorado Department of Regulatory Agencies. He also received a suspended sentence of eight years if he fails to follow the conditions of his 10-year probation. "It is unusual to obtain any restitution in criminal securities fraud cases because, more often than not, the funds are quickly spent by the defendant and cannot be recovered," said Securities Commissioner Gerald Rome. Wiens was arrested in April after leaving a Broomfield golf course. He faced 19 felony counts, including 10 counts of securities fraud, five counts of forgery and four counts of theft. As the director of RXM Holdings, he operated as an unlicensed securities professional between 2010 and 2011, engaging in the [...]

By |January 25th, 2016|Fraud, Press Releases & News|
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