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JP Energy Partners, L.P. Investments May Be Unsuitable For Some Investors
Recommendations to invest in JP Energy Partners L.P. (JP) by investment advisors and/or broker-dealers may be unsuitable, depending on the individual characteristics of investors and whether the broker had a reasonable basis for the recommendation.
JP is a master limited partnership (MLP) that produces and markets coal primarily to utilities and industrial users in the United States. Approximately 86% of all MLP securities market is made up of oil and gas companies. MLPs have become popular because they combine the tax benefits of a limited partnership with the liquidity of publicly traded securities. However, investments in these MLPs carry significant risks as they fluctuate with the price of oil and gas. For example, energy commodity prices are volatile, and drilling is a high-risk activity in and of itself as it can be difficult to predict the actual yield of wells prior to drilling.
JP’s business operations consists of four business segments: (I) crude oil pipelines and storage, (ii) crude oil supply and logistics, (III) refined products terminals and storage and (iv) Natural Gas Liquids (NGLs) distribution and sales. At its peak in 2015 JP was trading at $15.40 per share, but the shares began to rapidly decline as broader oil and gas prices plummeted. Today JP is trading at $4.50 per share.
When a broker recommends that a client purchase or sell a security, the broker must have a reasonable basis for believing that the recommendation is suitable for the investor. In making this assessment, a broker must consider the investors income and net worth, investment objectives, risk tolerance, and other security holdings.
If you believe you have been the victim of stockbroker misconduct, you may wish to consult an attorney to find out more about your legal rights and options. Investors may contact a securities arbitration attorney at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.