Investors Recover Losses on Main Street Natural Gas Bonds
A Financial Industry Regulatory Authority (FINRA) arbitration panel has awarded damages to the Gale family as a result of losses sustained in Lehman-backed Main Street Natural Gas Bonds sold to them by their broker. The panel granted rescission, which is to say it ordered the brokerage firm to take back the bonds and reimburse the Gales the purchase price they paid for the bonds. On top of that, the panel awarded $11,000 as “compensatory damages” (which probably represented interest on the purchase price) and $300 for reimbursement of the non-refundable portion of the FINRA filing fee.
Payment of these bonds was dependent upon guarantees by Lehman Brothers and one of its subsidiaries. Thus, the Main Street Natural Gas Bonds were directly dependent upon the financial viability of Lehman Brothers. The Main Street Natural Gas Bonds plummeted in value when Lehman Brothers filed for bankruptcy in September 2008, and Lehman Brothers Commodities Services Inc. failed to make deliveries of the gas.
Many investors were not adequately informed of the bonds dependence on Lehman’s financial viability and of the financial problems Lehman was having. These omissions to disclose material information are actionable because the financial press was full of alarming news about Lehman Brothers at least as early as June 2007.
“We continue to receive inquiries from investors who were sold these Lehman-backed Main Street Natural Gas Bonds,” said J. Boyd Page, a senior partner at Page Perry, LLC in Atlanta. “Our legal team continues to investigate and pursue arbitrations on behalf of investors who purchased these bonds,” he added. The brokers who sold the bonds are not targets of investor claims.
Page Perry, LLC is an Atlanta-based law firm with over 125 years collective experience representing institutional and individual investors in securities-related litigation and arbitration all over the country. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 30 occasions.
