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Main Street Natural Gas Bonds: The Ripple Effects Continue

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. 

One thought on “Main Street Natural Gas Bonds: The Ripple Effects Continue”

  1. Laura Says:

    Dale Yeager a nationally known criminal analyst says that news coverage of the recent investor scandals is missing a critical aspect of these crimes. This overlooked issue is something Yeager calls the “Due Diligence Mess.”

    Yeager, says the problem is the antiquated way due diligence is performed for investors.

    “The financial crimes of the past year will continue to occur unless radical changes are made in the due diligence process,” states Yeager. “Due diligence must be performed as a criminal investigation not just a financial assessment.”

    Based on his experience performing over 200 financial investigations, he believes that the focus must be on the ethics of the people operating the organization the investor will be placing their money into.

    “Due diligence is about assessing a person’s credibility” states Yeager, “and people assessment has and always will be the domain of forensic psychology. Look at the amount of negative information that reporters have discovered about Madoff over the past few months. Information that provides a specific psychological profile of him, showing a lifelong pattern of narcissistic and unethical behavior.”

    Yeager lays out a plan of action to prevent investor fraud with his article, “The Due Diligence Mess: 3 Reasons Why Ponzi Schemes and Investor Fraud Will Continue”.

    “People have become accustom to using forensic accountants,” states Yeager. “But they need to become accustom to using that process in accessing behavior and personal ethics.

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