Securities Lawyers Blog
Atlas Energy Group (NYSE:ATLS) is the general partner of Atlas Resource Partners (NYSE:ARP), a sponsor of oil and gas private placements and investments. The investment attorneys at Gana Weinstein LLP continue to report on investor losses in oil and gas related investments, like Atlas.
Atlas Energy Group and Atlas Resource Partners stock have both completely collapsed recently with both losing over 95% of their value over the past 2 years. Trying to unravel the business of the Atlas entities is nearly impossible. Even Atlas’ website fails to provide any meaningful understanding as to the business.
The website states that the business of Atlas Energy involves the ownership of: 1) 100% general partner interest and incentive distribution rights of Atlas Resource Partners, LP an exploration and production MLP; 2) 25 million ARP units, which includes ~21 million common units and 3.75 million Class C Preferred units in ARP; 3) 80% general partner interest and incentive distribution rights, as well as an 8% limited partner interest in Atlas Energy’s E&P Development Subsidiary; 4) 16% general partner interest and 12% limited partner interest in Lightfoot Capital Partners, which has a 40% limited partner interest in Arc Logistics Partners LP (NYSE: ARCX), an independent U.S.-based energy logistics service provider. Did this description clarify things?
On the private placement side, as recently reported in Reuters, Atlas Energy LP has marketed itself to investors as a way to get into the U.S. energy boom. Our firm has reported on the lopsided nature of these private placements. See Atlas Energy Oil and Gas Investments: A Risky Proposition Part I. According to Reuters, investors only get to see 65-70% of their capital actually put to work on oil and gas projects. Further, the returns on these projects have more in common with running profitable casinos than investments. Reuters found that slightly more than half of 43 private placements Atlas issued over the past three decades investors lost money or just broke even. While investors lost in more than half of the deals in 29 or 67% of those deals, Atlas actually out-performed their own investors.
Whether investing in Atlas related private placements, common stock, or MLPs investors have been left holding the bag.
Before recommending investments in oil and gas and commodities related investments, brokers and advisors must ensure that the investment is appropriate for the investor and conduct due diligence on the company in order to understand the risks and prospects of the company. Oil and gas and commodities related investments have been recommended by brokers under the assumption that commodities prices would continue to go up. However, brokers who sell oil and gas and commodities products are obligated to understand the risks of these investments and convey them to clients.
Our firm is investigating potential securities claims against brokerage firms over sales practices related to the recommendations of oil & gas and commodities products such as exchange traded notes (ETNs), structured notes, private placements, master limited partnerships (MLPs), leveraged ETFs, mutual funds, and individual stocks. Investors who have suffered losses may be able recover their losses through securities arbitration. Our consultations are free of charge and the firm is only compensated if you recover.