Priority Income Fund Fails to File Financials as NAV Declines
The White Law Group continues to investigate potential securities fraud claims involving broker dealers who may have improperly recommended Priority Income Fund to investors.
Priority Income Fund is a speculative, high risk, illiquid, closed-ended mutual fund, and not suitable for every investor.
On August 29, 2023, Priority Income Fund reported that they would be unable to file their annual reports for the fiscal year ended June 30, 2023, in a timely manner. The company noted that they and their independent public accounting firm needs “additional time to complete the documentation of the audit of the company’s financial statements.” Priority reportedly anticipates filing the annual report within the extension period of 15 calendar days.
Complex, High-Risk Investment
Priority Income Fund invests at least 80% of total assists in securitized pools of senior secured loans and/or investing in senior secured loans in the primary or secondary markets, according to the prospectus. The Fund’s investment strategy reportedly involves investments in securities issued by foreign entities, which exposes investors to risks not typically associated with investing in U.S. securities. The fund invests in equity and junior tranches of collateralized loan obligations (“CLOs”), which may be riskier than a direct investment in the underlying companies. CLOs will typically have no significant assets other than their underlying Senior Secured Loans.
Last year in filings with the SEC the company reportedly revised its liquidity strategy from intentions to pursue a liquidity event at the completion of the offering to language stating that the company “may, but are not obligated to, pursue a liquidity event for our stockholders following the completion of this offering.”
Declining Net Asset Value – Priority Income Fund
The Company’s NAV per Share was $12.64 as of November 30, 2021, but has dropped again, according to filings with the SEC. The fund’s NAV has continued to decline since it was originally offered at $15.00 per share.
As of September 16, 2022, there were 47,657,412 Shares issued and outstanding. The company reportedly extended a tender offer to provide stockholders with liquidity because there is otherwise no public market for the Shares. The current net asset value per Share is reportedly $11.12 as of October 31, 2022.
The company reportedly discloses three pages of Risk Factors, stating that “an investment in our shares involves a high degree of risk and may be considered speculative.” According to Priority Income Fund, Risk Factors include but are not limited to:
- Global economic, political and market conditions may adversely affect our business, results of operations and financial condition, including our revenue growth and profitability.
- We are not obligated to complete a liquidity event by a specified date; therefore, it will be difficult or impossible for an investor to sell his or her shares, which are not listed on a securities exchange.
- Our shares are not currently listed on any securities exchange, and we do not expect a public market for them to develop in the foreseeable future, if ever. Therefore, stockholders should not expect to be able to sell their shares promptly or at a desired price.
- The amount of any distributions we may make is uncertain.
Filing a Complaint against your Brokerage Firm
Brokerage firms have a responsibility to adequately disclose all risks before selling any investment and must consider suitability factors such as age, financial needs, and risk tolerance to name a few.
Firms that do not perform adequate due diligence on an investment or demonstrate a breach of fiduciary duty can be held accountable for losses incurred through FINRA arbitration.
If you are concerned about an investment in Priority Income Fund Inc., The White Law Group may be able to help you by filing a complaint against your brokerage firm. Please call the offices at 888-637-5510 for a free consultation with a securities attorney.
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 Seattle, Washington.
For more information on the firm, please visit https://www.whitesecuritieslaw.com.
Tags: Priority Income Fund Last modified: September 15, 2023