Concerned about your FS Energy & Power Fund Losses?
For more information on how to recover your losses in FS Energy & Power Fund, please press play for a short video.
Are you concerned about FS Energy & Power Fund losses at the recommendation of your financial advisor? If so, the securities attorneys at The White Law Group may be able to help you to recover your FS Energy & Power Fund losses through FINRA arbitration.
FS Energy & Power Fund (FSEP) is a publicly registered, non-traded business development company sponsored by FS Investments, according to its website. FSEP 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.
Business Development Companies, such as FSEP provide debt financing for small- and medium-sized business that aren’t covered by a traditional rating agency. In doing so, BDCs often collect higher interest income than the average.
Non-traded BDCs carry some serious risks for investor. It’s not uncommon for investors to face sales commissions as high as 10% that go to the brokers selling them. Additionally, many BDCs also have outrageous fees, charging 2% annually on the total value of your assets in addition to a 20% fee on any profits.
Non-traded BDCs are also illiquid and when you are ready to sell, you may not be able to find a buyer, and if so, at a much reduced price.
Update on March 25, 2020 – FSEP Suspends Share Repurchase Program and Distributions
The board of FS Energy and Power Fund just announced its plans to terminate the company’s quarterly tender offer and suspend 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.
Update on January 29, 2020 – NAV and DRP Continues Decline
The downward trend in value apparently continues for FSEP. As of September 30, the share price for FSEP under its distribution reinvestment plan (the “DRP”) is $5.85 per share. We reported in January 2018 a decrease from $7.15 per share to $6.70 per share, and in July 2017 it decreased from $7.65 per share to $7.20 per share.
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.
Unfortunately for investors, the NAV per share is currently $5.75 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 from private placements, shares of FSEP were recently sold for just $3.90 per share. This could mean significant losses for investors.
Recovery of Investment Losses
The White Law Group has received numerous calls from investors who have suffered losses investing in FS Energy & Power Fund at the advice of their financial advisor.
Prior to making recommendations to an individual investor, brokerage firms are required by the Financial Industry Regulatory Authority (FINRA) to disclose all the risks of an investment. Recommendations should only be made if the investment is suitable for an individual investor given their age, investment objections, investment experience and risk tolerance.
Brokerage firms that do not perform adequate due diligence on an investment and/or make unsuitable recommendations can be held accountable for investment losses through FINRA arbitration.
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.
To determine whether you may be able to recover your FS Energy & Power Fund losses, please contact 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 Franklin, Tennessee. 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.