MSC Income Fund Shareholders may have Claims
Are you concerned about your investment losses in MSC Income Fund? If so, The White Law Group may be able to help you recover your losses by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.
MSC Income Fund (formerly known as HMS Income Fund) is a principal investment fund that provides debt and equity financing solutions primarily to private U.S. companies.
According to Hines Securities’ website, under a new advisory agreement recently approved by HMS Income fund’s shareholders, the subsidiary of Main Street Capital Corporation (NYSE: MAIN) that had been serving as the Fund’s sub-advisor is now the sole investment adviser and administrator of the Fund. As part of this transaction, the Fund became known as MSC Income Fund, Inc.
The Fund’s investment objective is to generate both current income and capital appreciation for its investors, according to its website. The Fund’s portfolio investments are typically made to support management buyouts, recapitalizations, growth financings, refinancing and acquisitions of companies that operate in diverse industry sectors.
As previously reported, the Board voted to suspend all distributions to the fund’s stockholders in July 2020, to preserve financial flexibility and liquidity, citing market events caused by the global outbreak of COVID-19 and its impact on the financial markets in U.S. and global economies.
Decrease in DRP Price
According to SEC filings on April 8, 2020, the fund announced a 14.8% decrease in the price at which it issued shares under its distribution reinvestment plan from $7.80 to $6.65 as of April 1, 2020. This comes after a similar decrease in December 2019, from $8.00 to $7.95.
Declining Secondary Sales Price
Central Trade & Transfer, a secondary market for alternative investments, listed shares of HMS Income Fund for sale in March 2020 for $7.00/share, but the shares apparently did not sell at that price. Shares were sold in December 2020 for $3.77 per share. This many indicate losses for investors as the original offering price was $10.00 per share.
The White Law Group continues to investigate potential claims against the broker dealers that sold high risk investments, like MSC Income Fund.
A Business Development Company (“BDC”) invests in small and mid-sized businesses. Investors can buy shares in a BDC, and the money from their investments is used to fund the businesses. In turn, investors can profit from dividends paid on their investments, or, in some cases, the sale of their shares. The creation of BDCs was meant to spur investment in smaller companies that couldn’t attract traditional forms of capital.
Business Development Companies operate much in the same way as a non-traded REIT (Real Estate Investment Trust) and have the same risks for investors such as high-risk, high commissions, and lack of liquidity.
Filing a Complaint against your Brokerage Firm
The White Law Group has represented a number of investors over the last few years in non-traded REITs and BDCs. Unfortunately, unscrupulous financial advisors will push these products to maximize their own commissions. The firm is investigating the liability that FINRA registered brokerage firms may have for improperly recommending high-risk business development companies, like MSC Income Fund to investors.
Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor. Firms that fail to do so, may be held responsible for any losses in a FINRA arbitration claim.
If you have concerns regarding your investment in MSC Income Fund Inc. and would like to speak with a securities attorney about your options, please call The White Law Group at 888-637-5510.
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.
For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit https://www.whitesecuritieslaw.com.
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