February 20, 2017 Comments (0) Current Investigations

FS Energy & Power Fund Extends Tender Offer

Aztec XI-D Oil & Gas LP
(Last Updated On: March 31, 2017)

Are you concerned about your investment losses in FS Energy & Power Fund?

Have you suffered losses investing in FS Energy & Power Fund? 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 recent SEC Filings, FS Energy & Power Fund has extended another Tender Offer Statement with an offer by the Company to purchase up to 10,224,187 of the Company’s issued and outstanding common shares of beneficial interest, par value $0.001 per share.

As of February 15, 2017, there were 439,929,379 Shares issued and outstanding. The Offer is for cash at a price equal to the price at which Shares are issued pursuant to the Company’s distribution reinvestment plan on March 31, 2017.

The Purchase Price (and the price at which Shares will be issued pursuant to the Company’s distribution reinvestment plan) will be determined by the Company’s board of trustees or a committee thereof, in its sole discretion. The most recent price at which Shares were issued pursuant to the Company’s distribution reinvestment plan on January 31, 2017 was $7.75000 per Share. The Purchase Price for Shares in this Offer may be higher or lower than this amount, according to the SEC filing.

According to the latest tear sheet on their website, total assets are $4 billion.

As a non-traded BDC, the FS Energy and Power Fund limits how much stock “exiting” investors can sell. Unfortunately investors may want to exit since performance has been sub-par due to oil prices.

Problems with Alternative Investments

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 continues to investigate the liability that brokerage firms may have for improperly selling BDCs like FS Energy & 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 the high sales commissions and due diligence fees the brokers earn for selling such products sometimes can provide brokers with an enormous incentive to push the product to unsuspecting investors who do not fully understand the risks of these types of investments or to outright misrepresent the basic features of the products – usually 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 and 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.

For more information see, Alternative Investment Product

Free Consultation

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 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 and its representation of investors, visit www.WhiteSecuritiesLaw.com.