March 30, 2021 Comments Off on FS Energy & Power Fund (FSEP) Lawsuits Investigation Blog, Current Investigations

FS Energy & Power Fund (FSEP) Lawsuits Investigation

FSEP’s NAV continues to decline after Suspension of SRP

Invest in FS Energy & Power Fund (FSEP)? The White Law Group may be able to help you recover your financial losses. The White Law Group continues to investigate the liability that brokerage firms may have for unsuitably recommending FS Energy & Power Fund to investors.

FSEP (FS Energy & Power Fund) is a publicly registered, non-traded business development company sponsored by FS Investments. According to the company’s web page, market events in 2020 have impacted the financial markets and significantly disrupted U.S. and global economies, including energy markets.

The fund focuses primarily on investing in the debt and income-oriented equity securities of privately held U.S. companies in the energy and power industry. FSEP’s investment objectives are to “generate current income and long-term capital appreciation,” according to its website.

NAV and DRP Continues Decline

The downward trend in value apparently continues for FSEP. Unfortunately for investors, FSEP’s NAV per share is currently $3.25 per share and continues a similar downward trend. Shares were originally offered for $10.00 per share.

According to Central Trade and Transfer, a secondary market for private placements, shares of FSEP were recently sold for just $1.86 per share, indicating significant losses for investors.

According to the company, the purpose of these decreases is to ensure that the Company does not issue shares under the DRP at a price per share that was more than 2.5% greater than the NAV Per Share.

Suspension of Redemptions

Last year, on March 25, 2020, FSEP apparently terminated the company’s quarterly tender offer and suspended the share repurchase program, citing difficult market conditions due to the coronavirus (COVID-19) pandemic and events relating to crude oil production as the reason for the changes. The company also suspended regular cash distributions to shareholders after March 31, 2020.

Potential Lawsuits to Recover Financial Losses

The White Law Group has represented numerous investors in claims against their brokerage firms to recover losses in alternative investments such as FSEP. For more information on the firm’s investigations, please see the following:

FSKR – FS Investments Lawsuits Update 2021

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The trouble with alternative investment products like FSEP is that they involve a high degree of risk. They are typically sold as unregistered securities which lack the same regulatory oversight as more traditional investment products like stocks or bonds. Another issue is illiquidity – it may be difficult to find a buyer when you are ready to sell the investment, and when you do, it may be at a loss.

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.