- Cion Investment Corporation is a non traded business development company or BDC that is now potentially illiquid.
- Retirees are suing their stock broker over the investment in CION.
- Cion Investment Corp and FS Energy and Power Fund are at the center of the claim.
In April 2020, CION asked investors for a vote at their annual shareholder meeting to discuss a potential sale of CION at significantly below net asset value.
Soreide Law Group is representing two retirees from Cape Coral, Florida who are suing their LPL Financial broker who sold them a large concentrated position in Cion Investment Corp. and FS Energy and Power Fund. The Claimants have realized hundreds of thousands of dollars in losses and were told that their now potentially illiquid investments were safe and suitable for retirees.
Cion Investment Corp and FS Energy are classified as “Non-Conventional Investment” and a broker must go through a heightened analysis before making any such a recommendation. FINRA Notice to Members 03-71, “Non-Conventional Investments”, warns of the dangers of placing investors into investments that don’t fall into a common category. All of the investments listed above can be classified as “Non-Conventional” and according to FINRA 03-71 these investments should not be sold without: (1) performing due diligence to understand the features of the product; (2) perform a reasonable basis suitability analysis; (3) perform a customer specific suitability analysis; (4) provide a balanced disclosure of both the risks and rewards, especially when selling to a retail investor; (5) implement appropriate internal controls; and (6) training registered persons regarding the features, risks, suitability of these products. The FINRA lawsuit filed against LPL by Soreide Law Group alleges that LPL failed to due adequate due diligence and failed to recommend suitable investments.
If you purchased Cion Investments or FS Energy through LPL or any broker call Soreide Law Group today at 888-760-6552 for a free consultation or visit www.SecuritiesLawyer.com for more information. Soreide Law represents investors nationwide through FINRA and handles all cases on a contingency fee.
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