FS Investments – Securities Investigation
Are you concerned about your FS Investments offerings? If so, the securities attorneys at The White Law Group may be able to help you by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.
According to the DI Wire, FS/KKR Advisor LLC, a partnership between FS Investments and KKR Credit Advisors LLC, are planning to merge four non-traded business development companies under its advisement. The BDCs include FS Investment Corporation II (FSIC II), FS Investment Corporation III (FSIC III), FS Investment Corporation IV (FSIC IV) and Corporate Capital Trust II (CCT II).
With more than $9 billion in assets as of March 31, 2019, FS/KKR Advisor reportedly said that the combined company will become the second largest BDC by assets under management.
Shareholders of FSIC III, FSIC IV and CCT II will reportedly receive a number of FSIC II shares with a net asset value equal to the NAV of the shares they hold in each respective fund, as determined shortly before closing.
The common equity of the combined company is currently expected to be listed on the New York Stock Exchange in the fourth quarter of 2019, subject to final board approval and “market conditions”.
The boards of FSIC II, FSIC III, FSIC IV and CCT II have reportedly approved the transaction, and the mergers are expected to close in the fourth quarter of 2019, subject to shareholder approval and other customary closing conditions.
The issuance of the 5.50 percent perpetual preferred equity to the holders of the combined company’s common equity and the listing of the combined company’s common equity on the New York Stock Exchange are also expected to occur in the fourth quarter of 2019, subject to board approval and market conditions.
The White Law Group continues its investigation into FINRA Registered broker dealers who may have unsuitably recommended BDCs such as FS Investments offerings to investors.
The trouble with alternative investment products, like FS Investment Corporation II 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.
Broker dealers that sell alternative investments are required to perform adequate due diligence on all investment recommendations. They must 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.
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. Often, financial advisors may focus 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.
Free Consultation with a Securities Attorney
To determine whether you may be able to recover investment losses incurred as a result of your purchase of an FS Investment Corp. offering or another 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. 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.
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