HMS Income Fund Inc. Suspends Distributions after Decreasing DRP Price

Are you concerned about your investment in HMS Income Fund Inc. at the recommendation of your financial advisor? 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.

HMS Income Fund is a publicly registered, non-traded business development company (BDC) sponsored by Hines.

According to filings with the SEC on July 1, 2020, the Board unanimously approved the suspension of all distributions to its stockholders, effective immediately, citing recent market events caused by the global outbreak of COVID-19 and its impact on the financial markets in U.S. and global economies. 

The Board reportedly determined that it was in the best interest of the Company to suspend distributions in order to preserve financial flexibility and liquidity given the potential prolonged impact of COVID-19. The company noted that distributions for the future will be “reevaluated by the Board based on circumstances and expectations at the time of consideration.”

Fund Decreases DRP Price, Secondary Sales Price Decreases

According to SEC filings on April 8, 2020, HMS Income Fund Inc. announced a 14.8% decrease in the price at which it issued shares under its distribution reinvestment plan from $7.80 to $6.65 as of April 1, 2020.  This comes after a similar decrease in December 2019, from $8.00 to $7.95.

A Business Development Company (BDC) is a company that invests in small and mid-sized businesses. Investors can buy shares in a BDC, and the money from their investments is used to fund the businesses. In turn, investors can profit from dividends paid on their investments, or, possibly, the sale of their shares.

Non-traded BDCs are high-risk investments. They typically have high commissions, and lack liquidity–similar to real estate investment trusts (REITs).

Central Trade & Transfer, a secondary market for alternative investments, listed shares of HMS Income Fund for sale in March for $7.00/share, but the shares apparently did not sell at that price. Today shares are listed for $4.00 per share. This many indicate losses for investors as the original offering price was $10.00 per share.

The White Law Group continues to investigate potential claims against the broker dealers that sold high risk investments, like HMS Income Fund.

Filing a Complaint against your Brokerage Firm

Broker-dealers are required to perform adequate due diligence on any investment they recommend. They should also ensure that all recommendations are suitable for the investor. Recommendations should be appropriate in light of the investor’s age, risk tolerance, net worth, and investment experience.

Broker-dealers that fail to adequately disclose risks or make unsuitable investment recommendations can be held liable for investment losses in a FINRA arbitration claim.

If you have suffered losses investing in HMS Income Fund, the securities attorneys at The White Law Group may be able to help you. Please call The White Law Group at 1-888-637-5510 for a free consultation.

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

To learn more about the investigation, please see:

Investor Alert: MSC Income Fund, Inc. (fkn HMS Income Fund, Inc.)