Investigating Potential Claims Involving FS Energy & Power Fund
FS Energy & Power Fund (FSEP) is an investment offered by FS Investments, formerly Franklin Square Capital Partners, and focuses primarily on investing in the debt securities of private companies throughout the United States.
FSEP is a non-traded business development company (BDC). 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. The company closed its continuous public offering to new investors in November 2016 after raising approximately $4.3 billion in investor equity.
The White Law Group continues to investigate the liability that brokerage firms may have for improperly selling Business Development Companies (BDCs) like FS Energy & Power Fund.
The Problem with Alternative Investments
The trouble with Business Development Companies, like FS Energy & Power Fund, 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. Liquidity can also be a problem.
Unfortunately for investors, Central Trade & Transfer, a secondary market for private placements, is recently listed shares of FS Energy & Power Fund for just $6.85 per share. The original offering price was $10.00/share.
Broker dealers that sell alternative investments such as FS Energy & Power Fund, 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.
Another problem with Reg D private placements is the high sales commissions and due diligence fees the brokers earn for selling such products. Sometimes this 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. They often 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 FS Investments product, please contact The White Law Group at 1-888-637-5510 for a free consultation. For more information on the investigation, please visit Investor Alert: FS Energy & Power Fund.
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 firm and its representation of investors, visit www.WhiteSecuritiesLaw.com.