Securities Investigation – Alternative Investment – FS Energy and Power Fund
Have you suffered investment losses in FS Energy and Power Fund (FSEP II)? 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.
FS Energy and Power Fund is a non-traded business development company (BDC) designed to provide investors a combination of income, growth and diversification by investing primarily in the debt and income-oriented securities of private U.S. energy and power companies.
It is an investment offered by FS Investments.
On September 27, 2016, FS Energy and Power Fund increased its public offering price, in accordance with its share pricing policy, to $8.25 per share from $8.15 per share. The increase in the offering price is effective as of September 21, 2016.
According to its website, FS Investments (formerly known as Franklin Square Capital Partners) gives investors access to alternative asset classes, strategies and asset managers that typically have been available to only the largest institutional investors.
FS Investments often raises money for investments through Reg D private placement offerings like the company did for FS Energy and Power Fund. These Reg D private placements are then typically sold by brokerage firms in exchange for a large up front commission, usually between 7-10%, as well as additional “due diligence fees” that can range from 1-3%.
The trouble with alternative investment products, like FS Energy & Power Fund and other similar BDCs, is that they involve a high degree of risk and 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 is investigating the liability that brokerage firms may have for improperly selling BDCs like FS Energy and Power Fund.
Broker dealers that sell alternative investments are required to perform adequate due diligence on all investment recommendations to 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 brokers can earn high sales commissions and due diligence fees for selling such products. Sometimes this may provide brokers with an enormous incentive to push the product to unsuspecting investors, focusing 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 and Power Fund or another FS Investments offering, please contact The White Law Group at 1-888-637-5510 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida. The firm represents investors throughout the country in claims against their brokerage firm.
For more information on the firm, visit www.WhiteSecuritiesLaw.com.