Investors Suing SemGroup Energy Partners

SemGroup Energy investors lost several hundred million dollars in just one week.  The publicly-traded company took a hit, after news broke that its privately-held parent company was in deep financial trouble.  The News On 6's Ashli Sims reports some of those who bought into the company now say they were duped.

SemGroup Energy units plummeted from about $22 to $8 in just five days.  That has investors suing for fraud.

A new lawsuit claims investors in SemGroup Energy Partners lost $300 million in just two days.  A local investor is behind the suit.

He says to understand the share-slide; you have to look at SemGroup Energy's privately-held parent company.

While SemGroup Energy was pumping oil through pipelines and storing it in tank farms, its parent company was dabbling in oil futures.  But, it bet big and bet wrong.

The investor lawsuit claims SemGroup Energy was obligated to tell its investors about its parent company's risky business because the parent company is SemGroup Energy's number one customer, accounting for 80% of its revenue.

The investor lawsuit claims that SemGroup Energy extolled the virtues of its partnership with its parent company, but never disclosed the parent company was in serious financial trouble.

When news hit that the parent company was on the brink of bankruptcy. SemGroup Energy's unit price plummeted from about $22 to $11 in one day.  The next day, it cratered again, wiping out hundreds of millions in investor dollars.

The lawsuit is hoping to recover some of that cash not only from the company, but its leaders.

At least two of them, SemGroup Energy's president and chief operating officer Kevin Foxx and Alex Stallings, the chief accounting officer, have positions in the parent company.  And, they have golden parachutes worth $1.4 million that kick in, if they're laid off.

This lawsuit has been filed as a class action on behalf of everyone who invested in SemGroup Energy Partners between February 20th and mid-July.

The investors' attorney says it could be hundreds of people.