Distributions per share also decrease in 2018– FS Energy & Power Fund
Did you lose money investing in FS Energy & Power Fund at the advice of your financial advisor? If so, The White Law Group may be able to help you recover your losses by filing a FINRA arbitration claim against the brokerage firm that sold you the investment.
According to SEC filings, on December 29, 2017, FS Energy & Power Fund announced a decrease in the price of shares issued under the distribution reinvestment plan (DRP) to $6.70 from $7.15 per share.
The company said the reduction was made to ensure that shares issued under the DRP are issued within 2.5% of the NAV per share.
Additionally, distributions per share have also decreased. The first quarter of 2018 shares decreased 29.4% — $0.041667 per month from $0.059042 per share as of November and December 2017.
FS Energy & Power Fund is a Business Development Company. The company invests primarily in the debt and income-oriented securities of private U.S. energy and power companies. FS Energy & Power Fund is sponsored by FS Investments.
The company reduced the price that shares are issued at under its distribution reinvestment plan to $7.20 from $7.65 per share back in July.
Investigating Potential Claims
The trouble with alternative investment products, like FS Energy & Power Fund and other similar BDCs, is that they involve a high degree of risk. They are typically sold as unregistered securities which lack the same regulatory oversight as more traditional investment products like stocks or bonds.
The White Law Group continues to investigate the liability that brokerage firms may have for unsuitably recommending BDCs like FS Energy & Power Fund to investors.
Broker dealers that sell alternative investments are required to perform adequate due diligence on all investment recommendations. They must ensure that each investment recommendation that is made is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.
However, another problem with Reg D private placements is that the high sales commissions and due diligence fees. Brokers may have an enormous incentive to push the product to unsuspecting investors for their own gain. Many investors don’t understand the risks of these types of investments since the brokers often focus on the income potential and tax benefits while downplaying the risks.
Fortunately, FINRA does provide for an arbitration forum for investors to resolve such disputes. If a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be found liable for investment losses in a FINRA arbitration claim.
To determine whether you may be able to recover investment losses incurred as a result of your purchase of FS Energy & Power Fund or another Franklin Square BDC, please contact The White Law Group at 1-888-637-5510 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee. The firm represents investors throughout the country in claims against their brokerage firm.
For more information on the firm and its representation of investors, visit www.WhiteSecuritiesLaw.com.
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