Category Archives: Main Street

Main Street Natural Gas Bonds

The September 2008 bankruptcy filing of Lehman Brothers Holdings is unlikely to fade from the memory of investors anytime soon. That’s because the bankruptcy had a ripple effect on other investments tied to Lehman, including investments in Main Street Natural Gas Bonds.

Main Street Natural Gas Bonds were marketed and sold by many Wall Street brokerages as safe, conservative municipal bonds. Instead, the bonds were complex derivative securities backed by Lehman Brothers. When Lehman filed for bankruptcy protection in September 2008, the trading values of the Main Street Bonds plummeted.

Many investors who put their money in Main Street Natural Gas Bonds allege that the brokers in question never disclosed all of the risks associated with the bonds nor did they reveal the fact that the bonds were connected to the financial health of Lehman Brothers.

If you were sold Main Street Natural Gas Bonds as a safe, low-risk investment, you may have a viable claim for recovery. Please contact our firm to tell us your story.

Main Street Natural Gas Bonds are an investment that many investors would like to forget. On Sept. 15, a $700 million deal called Main Street Natural Gas Bonds exploded, plummeting in value after Lehman Brothers Holdings – which guaranteed the bonds – filed for bankruptcy protection. Thousands of individual investors were affected, with many literally wiped out financially. 

Main Street Natural Gas Bonds were marketed and sold by some broker/dealers as safe, conservative municipal bonds. The reality is they were not. Instead, the Main Street bonds invested in complex natural gas derivative contracts that bet on the future costs of natural gas. The $700 million that Main Street borrowed to finance the contracts was placed with Lehman Brothers, which in turn, agreed to arrange delivery of some 200 billion cubic feet of natural gas at below-market prices.

Lehman’s promise went up in smoke when its fiscal health deteriorated beyond repair and it filed for bankruptcy protection. The ripple effect – and subsequent financial losses for investors – reverberated back to the value of the Main Street Gas bonds. 

Many investors who put their money in Main Street Natural Gas Bonds say their brokerage failed to disclose the fact that the value of their investment was tied to the financial health of Lehman Brothers. These same investors also contend they never received a prospectus about the bonds, which should have revealed key information and facts that investors are entitled to know.

If you believe you were misled about the safety of Main Street Natural Gas Bonds, contact us. A member of our securities fraud team will review your situation to determine if there is a viable claim to recover some or all of your investment losses. 

The story of Main Street Natural Gas Bonds serves as an invaluable lesson on the Wall Street-Main Street connection. Marketed as a supposedly “safe” investment, Main Street Natural Gas Bonds have spurned a cadre of lawsuits from investors who allege that brokerage firms misrepresented the safety of the bonds and omitted other key material facts about them. 

Among those facts: The Main Street Natural Gas Bonds shared very little in common with the safety of traditional municipal bonds. That’s because the Main Street bonds were connected to a gas supply contract of Lehman Brothers Holdings. When Lehman Brothers filed for bankruptcy protection in September 2008, the fate of the bonds was immediately put into jeopardy because their “safety” depended on the fiscal viability of Lehman Brothers.

In turn, individual and institutional investors were subsequently wiped out after Lehman’s commodities unit stopped delivering gas to the nonprofit corporation. 

Many of the investors who purchased Main Street Natural Gas Bonds did so because they were looking for a safe, tax-free income-producing investment backed by a municipality. What they got was far different than what they had in mind. 

The Financial Industry Regulatory Authority (FINRA) has launched an investigation into whether banks and brokerages that sold various issues of Main Street Natural Gas Bonds were forthcoming with investors about the true state of Lehman Brothers’ deteriorating financial condition. 

“One interesting firm ran a bunch of senior citizens’ sales seminars where they promoted these particular bonds as good,” said Malcolm Northam, FINRA’s director of fixed income securities, in a Sept. 24 Bloomberg article. “Maybe they were, at the time they were promoted. I don’t know. It raises interesting questions.” 

It’s also raising lawsuits. One Florida investor sued a broker, claiming the Main Street bonds were falsely touted as general obligation bonds guaranteed by the state of Georgia. 

If you invested in Main Street Natural Gas Bonds, you may have a viable claim to recover any investment losses you suffered following Lehman’s bankruptcy. Please contact our firm to tell us your story.

Main Street Natural Gas Bonds have proven to be an investor’s worst nightmare after they became subject to the bankruptcy of Lehman Brothers Holdings.

Marketed and sold by a number of brokerages as safe, conservative municipal bonds, Main Street Natural Gas Bonds actually were complex derivative securities backed by Lehman Brothers. When Lehman filed for bankruptcy protection in September 2008, the trading values of the Main Street bonds plummeted.

Many investors who put their money in Main Street Natural Gas Bonds have come forth with claims alleging they were never told that the viability of the Main Street investments was dependent on the viability of Lehman Brothers’ fiscal health. Investors didn’t know because they never received a prospectus on the bonds nor did their broker reveal the Lehman Brothers connection.

When a broker recommends an investment on behalf of a client, he has a legal obligation to adhere to that client’s specific investing objectives and risk tolerance levels. When this doesn’t happen, the broker has failed to uphold his fiduciary and due diligence duties.

If you were told Main Street Natural Gas Bonds were safe, low-risk municipal bonds, you may have a claim against the brokerage firm that sold the investment. Please contact our firm to tell your story.