Crosstex Energy LP merges to become EnLink Midstream Partners LP
The White Law Group is investigating potential claims involving broker dealers who may have unsuitably recommended Crosstex Energy LP and EnLink Midstream Partners LP to investors.
In 2014, Crosstex Energy, Inc. merged with Devon Energy and subsidiaries. Since closing, there are now two publicly traded entities in existence: EnLink Midstream, LLC and EnLink Midstream Partners, LP, respectively (collectively, “EnLink Midstream”).
Crosstex Energy raised capital through a Regulation D private placement investment in 2010 in Dallas, Texas.
The trouble with Reg D Private Placements, like Crosstex Energy LP, is that they involve a high degree of risk. They are typically sold as unregistered securities which lack the same regulatory oversight as more traditional investment products like stocks or bonds.
An additional risk inherent to these offerings is the general risk that comes with the energy market. The energy market has seen enormous losses over the last few years due to the declining cost of oil and other energy commodities. These investments may seem wise at first, until the dramatic drop in distributions.
Investigating Potential Claims
The White Law Group is investigating the liability that brokerage firms may have for improperly selling energy investments like Crosstex Energy LP to investors.
Broker dealers that sell private placements are required to perform adequate due diligence on all investment recommendations. They must ensure that each investment recommendation that is made is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.
Alternative investments such as these, have high sales commissions and due diligence fees. These high commissions and fees can provide brokers with an enormous incentive to push the product to unsuspecting investors who do not fully understand the risks. They may even focus on the income potential and tax benefits while downplaying the risks.
Fortunately, FINRA does provide for an arbitration forum for investors to resolve such disputes. If a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be found liable for investment losses in a FINRA arbitration claim.
Free Consultation with a Securities Attorney
If you are concerned about your investment in Crosstex Energy LP or another private placement investment, please contact The White Law Group at 1-888-637-5510 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida. The firm represents investors throughout the country in claims against their brokerage firm.
For more information on the firm and its representation of investors, visit www.WhiteSecuritiesLaw.com.