Investor rights attorneys at Mika Meyers, PLC are investigating possible sales practice violations by stock broker Thomas Murray Jr., of Rye Brook, New York relating to sales of Master Limited Partnerships and other high-risk energy investments and excessive concentration of client portfolios in the energy sector. Mr. Murray is currently registered with the brokerage firm Park Avenue Securities (CRD#: 46173) and was previously registered with FSC Securities Corporation (CRD#: 7461).
What is excessive concentration?
Excessive concentration is the opposite of diversification. The benefits of diversification are well established. By diversifying, investors can eliminate non-systematic risk, sometimes referred to as firm-specific risk, without decreasing the expected return on their portfolio. Through asset allocation, investors can increase and decrease systematic risk, or market risk, to match their risk tolerance.
Experts have concluded that, in order to maintain a well-diversified portfolio, no more than 5% of the portfolio should be invested in energy-sector investments. Henderson, Mallett, McCann and Meng, Retail Oil and Gas Investments (2015).
Master Limited Partnerships
Master Limited Partnerships (MLPs) are exchange-traded investments that are focused on exploration, development, mining, processing, or transportation of minerals or natural resources. Since the slump in the oil and gas market in 2014, numerous MLPs have reduced or suspended their distributions. Risks of MLPs include the following:
- Governance and standard of care can favor the sponsor.
- Conflicts of interest.
- Industry risk and concentrated exposure.
If you are a former customer of Thomas Murray Jr., and you have suffered investment losses, we may be able to help you recover some or all of your losses. We regularly evaluate and prosecute claims on behalf of investors who have suffered investment losses as a result of unsuitable investment recommendations. If you would like to discuss your claim with an experienced attorney who specializes in this area, call Daniel J. Broxup of Mika Meyers, PLC at (616) 632 8059.