Haslelkorn & Thibaut, P.A., continues to investigate the liability of the brokerage firms that recommended the FS Energy and Power Fund (FSEP), now known as the FS Specialty Lending Fund.
The fund has faced several challenges in recent years, leading to significant losses for investors:
In March 2020, FSEP terminated its quarterly takeover offer and suspended its share buyback program, citing difficult market conditions due to the COVID-19 pandemic and events related to crude oil production.
The company also suspended regular cash distributions to shareholders as of March 31, 2020.
The net asset value (NAV) per share has declined significantly, from the original offering price of $10.00 per share to $3.70 per share as of September 29, 2023.
Shares of FSEP were recently sold on the secondary market for as low as $1.86 to $2.15 per share, indicating substantial losses for investors.
The company has reported a decline in value, and we may be able to help you recover your financial losses. Considering the challenges, a potential shift to a diversified credit strategy could address the fund’s challenges by enhancing shareholder returns and targeting a liquidity event within three years.
Focusing on the fund’s total assets could play a crucial role in this strategy, aiming to enhance shareholder returns, maximize long-term liquidity options, and align the interests of shareholders and the Advisor to seek a long-term liquidity event that maximizes shareholder value within a targeted three-year timeframe.
The company’s website says: “Market events in 2020 have impacted financial markets and disrupted the U.S. and global economies, including energy markets. The FS Energy & Power Fund focuses on investments in debt and income-oriented securities held by US energy and energy companies. FSEP is a business development company (BDC).
Their investment goal is to generate current income and long-term capital appreciation. As part of our commitment to transparency and per federal securities laws, we continuously ensure that all forward-looking statements are accurate and updated.
It’s important to identify forward-looking statements that reflect our current views about future events and are subject to risks, uncertainties, and assumptions. An investment strategy change is being considered to navigate these market events effectively, aiming to enhance investor recovery options through a diversified approach.”
Investors should contact our investment fraud lawyers for options to recover their losses at 1-888-885-7162 for a free review.
What type of investment is FS Energy and Power Fund?
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FS Energy and Power Fund is a non-traded business development company (BDC). The FS Energy and Power Fund (FSEP) makes loans and equity investments, investing primarily in private energy and power enterprises that are typically engaged in the production of crude oil, natural gas liquids, coal, and other forms of energy.
This focus on a single sector focused strategy has historically presented risks and limitations, including increased volatility and dependency on the health of the energy sector. FSEP is now transitioning towards a diversified credit strategy to mitigate these risks, aiming to enhance shareholder returns and improve liquidity options. This investment is a high-risk, illiquid investment.
For investors in FSEP, NAV per share is currently $3.25 and continues to show a serious downward trend that looks like it will continue into the near future. According to FS Energy and Power, the purpose of this reduction is to ensure that the Company does not issue shares in FSEP at a price per share that is more than 25% above NAV per share. According to Central Trade and Transfer, the stock was sold in a private placement on the secondary market for $1.86 per share, indicating a significant loss for investors. The shares were offered at $1,000 per share (i.e.
Last year, on 25 March 2020, FSEP terminated its quarterly takeover offer and suspended its share buyback program, citing difficult market conditions due to the Coronavirus pandemic (COVID-19) and events related to crude oil production. The Company also suspended regular cash distributions to shareholders as of March 31, 2020.
FS Energy and Power Announcement
FS Energy & Power Fund has discontinued stock purchases. No shares from this year’s fund are slated to be refinanced as of today. FS/EIG or the Board will determine whether quarterly tender proposals can be launched with a future view on the markets and the fund’s financial state.
In this context, the fund is exploring options for a ‘liquidity event’ to enhance shareholder value by potentially engaging in a merger, sale of the portfolio, listing of the common stock on a national securities exchange, or other transaction approved by the Board, aimed at maximizing long-term liquidity options and enhancing returns to shareholders while minimizing volatility associated with a single sector-focused strategy.
In addition, the share repurchasing plan was closed due to market events that impacted the financial services market and disrupted the American and global economies.
The fund’s forward-looking statements are in compliance with the Securities Exchange Act, emphasizing the importance of disclosing potential factors that could affect future results as part of their filings with the SEC.
The Franklin Square Energy and Power Fund Board of Directors Suspends Repurchase Program
Franklin Square Energy and Power Fond (FSEP) suspended the purchase of shares and their share market fell again. Investors can be entitled to file broker fraudulent negligence allegations if the broker advised their broker-dealer inappropriately or fails to advise them of the risks. FSEP has cited CoVID-19 turbulence and the recent sinking prices as reasons for its economic woe.
In response to customer complaints about the firm, the firm has filed alleged stockbrokers and investors in relation to the FS Energy & Po. Call us today. To find out more or view a page link click here.
LPL brokers market non-traded investments to investors
A retired investor filed a federal claim in May 2017 with the FINRA in response to the ruling of the Securities and Exchange Commission. Tamber Proctor joined Securities America as a Licensed Broker but is currently not registered with a brokerage firm of Securities America.
Till at least December 2020 the veteran is currently an active investment adviser at Proctor – investment advisors and insurance in Waynesboro. The alleged violations include misrepresentations by a retired investment advisor and a false statement by the older investor.
LPL Financial Overconcentrated Older Investor’s Account in Illiquid Investments
The FS energy and solar fund was certainly not the suitable investment recommendation of this retiree’s IRA. The fund’s stock price has slumped substantially. The company also announced it would cancel investor distribution. The FS Energy & Power Fund is a very risky, illiquid investment and the fund is certainly unfit for its intended IRA.
The fund is a non-traded business development company (BDC) that deals with debt and equity securities of private energy and power – firms. Proctor said investors have since suspended distributions of X-Ray’s shares from February through July 2010. The retiree is an inexperienced investor not prepared to put up much stress.
Problems FS Energy Power Fund
Alternative investment products (FSEPs) involve a high level of risk. Managed by FS Investments, these funds, including the FS Energy & Power Fund and others, are sold as unregistered securities and are not subject to the same regulatory oversight as traditional investment products such as stocks and bonds.
Another problem is illiquidity, where it can be difficult to find a buyer if you are willing to sell the investment and you may suffer an investment loss. FS Investments has been transitioning some of its funds to include private and public credit investments in a broader range of industries, sectors, and sub-sectors.
This strategy aims to diversify the fund’s investments and reduce risk, but it also impacts the fund’s total assets due to the nature of these investments. Haselkorn & Thibaut has represented numerous investors in lawsuits against their brokerage firms to recover losses from alternative investments such as FSEPs.
Brokerage firms selling alternative investments must perform appropriate due diligence before recommending any investment. They must ensure that the investment recommendation suits the investor, considering age, risk tolerance, net assets, financial needs, and investment experience.
If you have suffered an investment loss through the FS Energy & Power Fund FSEP, Haselkorn & Thibaut can help. We are a national investment fraud, securities arbitration, and investor protection law firm located in Florida, Texas, New York, Arizona, and North Carolina. Call 1-888-885-7162 for more information and a free consultation.
