FS Energy & Power Fund: Latest News

Nov. 21, 2016 10:33 AM ETFSEN
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Securities attorney

Contributor Since 2011

The White Law Group is a national securities fraud, securities arbitration, investor protection and securities regulatory/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida. We pride ourselves on providing quality legal services to our clients and handle securities fraud cases throughout the country. Many of our clients have lost a significant portion of their net worth as the result of the negligence of their financial professional. As such, we believe that part of our role as attorney is to offer a supportive environment for our clients and to provide advice and support as we attempt to recover these investment losses. Dedicated to the representation of investors in claims against their financial professional or brokerage firm, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions. For more information about The White Law Group call our Chicago office at 312-238-9650 or visit us on the web at http://www.whitesecuritieslaw.com.

FS Energy and Power Fund closed its public offering to new investors this week, according to SEC Filings. The final closing for any outstanding subscriptions that were accepted by the company will occur on November 23, 2016. After the closing of the public offering, the company expects, subject to the discretion of the company's board of trustees and applicable law, the following will occur:

- FS Energy & Power Fund will continue to conduct quarterly tender offers pursuant to its share repurchase program.

- Distributions will be declared and paid on a monthly basis, as determined by the board.

-The company's distribution reinvestment plan will remain in effect and participating shareholders will be able to reinvest distributions at a price determined by the board of directors.

FS Energy & Power Fund total assets are $4 billion according to the latest tear sheet on their website. As a non-traded BDC, FS Energy & Power Fund limits how much stock investors can sell. Unfortunately investors may want to sell since performance has been below average due to diving oil prices.

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. For more information on the investigation see, Alternative Investment Product: FS Energy and 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.

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 White Law Group and its representation of investors, please visit www.WhiteSecuritiesLaw.com.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Recommended For You

Comments

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.