November 1, 2013 Comments (0) Blog, Securities Fraud

Closer look at Berhringer Harvard's Priority Senior Secured Income Fund

(Last Updated On: July 17, 2015)

Have you suffered significantly as a result of an investment in the Priority Senior Secured Income Fund? If so, The White Law Group may be able to help you recover your investment losses.

According to the Behringer Harvard website, on May 9, 2013 the company along with Prospect Capital Management announced the initial public offering of Priority Senior Secured Income Fund (PSSI).  PSSI is an investment company that was created to grow a portfolio that contained primarily secured loans and collateralized loan obligations (CLOs). CLOs are entities that typically manage a portfolio of senior secured loans.

The PSSI prospectus indicates that the fund is a non-traded offering, meaning that shares are not listed on any type of securities exchange. Furthermore, the fund does not expect a secondary market to form so investors should not expect to be able to sell their shares. Since PSSI is a newly formed company it has a limited operating history. In addition, the advisor has no prior experience managing a registered closed-end investment company. Other risks to consider included limited liquidity, exposure to leverage, and lack of transparency.

PSSI investors can also expect to pay significant fees. According to the prospectus, the sales load includes a 7% selling commission and a 3% dealer manager fee, in addition to an estimated 1.5% expense fee. That’s nearly 12% of an investor initial capital that is lost to fees.

Broker dealers have a fiduciary duty to perform adequate due diligence on every investment that the sell, not only to ensure a reasonable likelihood of success, but to determine that the investment is suitable for each individual client. Prior to selling investments broker-dealer must take into account the clients’ age, risk tolerance, investment objectives, and net worth in order to make appropriate recommendations. Broker dealers that fail to perform the necessary due diligence or sell investments that are not suitable for their client may be liable for investment losses.

Based on what is known, some broker dealers may have overlooked suitability requirements when selling PSSI. As such, The White Law Group is investigating potential claims against broker-dealers to recover investment losses.

If you purchased PSSI and would like to discuss your litigation options to recover your investment losses, please call The White Law Group at (312)238-9650 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.

To learn more about The White Law Group, visit www.WhiteSecuritiesLaw.com.

-->