FS Energy and Power Fund investors face serious financial troubles. We’ve seen the fund’s value drop from $10.00 to just $3.25 as of September 29, 2023. This means many people lost over 60% of their money.
If you’ve invested in FS Energy & Power Fund and experienced losses, contact Haselkorn & Thibaut’s securities attorneys at 1-888-885-7162 for a free case evaluation.
The Energy and Power Fund, also known as the FS Energy and Power Fund, is a non-traded business development company (BDC) that invests primarily in debt and equity securities of private energy and power companies. The fund’s investment strategy is focused on generating current income and long-term capital appreciation for its shareholders.
As a specialty lending fund, it operates under the regulations of the Securities Exchange Act and is subject to federal securities laws. The fund’s net asset value (NAV) is a key indicator of its performance, and it is essential for investors to understand the risks associated with investing in a single sector-focused strategy.
Fund Overview and Investment Strategy
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The FS Energy and Power Fund, now known as the FS Specialty Lending Fund, has undergone a significant investment strategy change, transitioning from investing primarily in private U.S. energy and power companies to a diversified credit strategy. This change aims to enhance shareholder returns and reduce the risks associated with a single sector-focused strategy.
The fund’s investment strategy involves investing in private and public credit in a broader set of industries, sectors, and subsectors, with the objective of generating current income and long-term capital appreciation.
As a business development company, the fund is required to provide adequate disclosure about its operations, including its investment strategy, risk management practices, and financial performance. The fund’s total assets are managed by FS Investments, and its investment recommendations are subject to the same regulatory oversight as traditional investment products.
However, as an alternative investment, the fund may not be suitable for all investors, and it is essential to conduct adequate due diligence before making an investment decision.
Urgent: Free Consultation for Affected Investors
If you’ve invested in FS Energy & Power Fund and experienced losses, contact Haselkorn & Thibaut’s securities attorneys at 1-888-885-7162 for a free case evaluation. Time limitations apply, so call today.
Current Situation for Investors
FS Energy & Power Fund’s value has dropped from $10.00 to just $3.25 per share as of September 29, 2023. This represents a significant 67.5% decline in investment value, leaving many investors concerned about their financial future.
In March 2020, the fund completely suspended both its share repurchase program and cash distributions. This action effectively eliminated liquidity options for investors and cut off expected income streams that many relied upon.
The troubling situation has prompted Haselkorn & Thibaut, P.A., a leading securities law firm specializing in investor advocacy, to launch formal investigations into these matters. Their experienced attorneys are actively reviewing cases nationwide.
These investigations focus on whether financial advisors fully disclosed the risks associated with FSEP investments. In a notable case from May 2017, a retired investor successfully filed a claim after their advisor allegedly misrepresented the fundamental risks of FSEP. Investors who have experienced significant losses may seek recovery through securities arbitration.
Since 2021, many investors have recovered significant compensation through FINRA arbitration claims. The key issues typically involve inadequate risk disclosure, liquidity misrepresentations, and unsuitable investment recommendations.
Even FS Investments’ CEO Michael Forman publicly acknowledged the fund’s challenges in November 2018, confirming the concerns many investors have expressed. If you’re affected by this situation, understanding your legal options is crucial for potential recovery.
Key Points for Investors
FS Energy & Power Fund’s share value declined from $10.00 to $3.25 per share, representing a substantial change in investment value.
In March 2020, the fund suspended both its share repurchase programs and cash distributions.
Some financial advisors may not have fully explained the risk profile and liquidity characteristics of FSEP, which could potentially conflict with FINRA regulations about proper risk disclosure.
Affected investors may pursue recovery through individual FINRA arbitration claims against their financial advisors. Investors may seek to recover losses through legal actions against their financial advisor.
There are time limitations on investment claims, so prompt action is advisable for those seeking to explore their options.
Challenges Faced by FS Energy & Power Fund Investors
Many FS Energy & Power Fund investors have experienced financial challenges due to declining values and limited liquidity options. The fund’s investments in unregistered securities involve higher risks and require investors to have adequate financial means. Some clients have seen substantial reductions in their original investment while facing restrictions on selling their shares or receiving expected income payments.
Substantial Investment Value Decline
FS Energy & Power Fund investors have watched their investments steadily deteriorate over recent years. The fund’s market value has collapsed, devastating retail investors who trusted their financial futures to this business development company.
The fund’s Net Asset Value (NAV) has plunged by over 67% – from an initial $10.00 to just $3.25 per share according to the latest report. For many retirees and conservative investors, this dramatic decline represents life-changing suffered losses. Many investors have suffered financial losses and may need legal support to address these issues.
Making matters worse, shares now trade on the secondary market at even deeper discounts – between just $1.86 and $2.15 per share. This represents up to an 81% loss from the initial investment value. Additionally, investors paid substantial fees, sometimes reaching 10%, further eroding their returns.
The inherent illiquidity of non-traded Business Development Companies (BDCs) has trapped many investors, preventing them from exiting these positions as values declined. These devastating losses have triggered numerous securities investigations and FINRA arbitration claims, including a landmark case filed by a retired investor in May 2017 who alleged serious advisor misconduct regarding FSEP recommendations.
Suspension of Repurchase Programs and Distributions
FS Energy & Power Fund investors experienced significant changes in 2020. The fund suspended its quarterly tender offers and share buyback programs in March 2020. This development affected the primary exit mechanism for many investors seeking liquidity from this alternative investment. The suspension of repurchase programs has delayed any potential liquidity event.
Regular cash distributions to shareholders were discontinued after March 31, 2020. The suspension affected multiple related funds including FSIC II, FSIC III, FSIC IV, and CCT II.
These actions created financial adjustments for investors who had incorporated these distributions into their income planning.
The Board of Directors has not provided specific timelines for reinstating these shareholder programs. They indicated future tender proposals would be contingent on market conditions, creating uncertainty for investors. Investors are now uncertain about the possibility of a long term liquidity event.
Some financial advisors may not have adequately explained these liquidity considerations before recommending the investment. FINRA regulations require comprehensive disclosure of such characteristics. The suspension of both repurchase options and distributions has created liquidity constraints for investors in these instruments.
Haselkorn & Thibaut helps affected investors explore recovery options through securities regulations designed to protect investor interests.
Investigation Findings Regarding FS Energy & Power Fund
Investigations into FS Energy & Power Fund have identified important questions about how the fund was presented to investors. These investigations also aim to identify forward-looking statements that may have misled investors. The legal team at Haselkorn & Thibaut has found evidence suggesting some financial advisors may not have fully explained the risk profile of these energy-focused investments. These statements often involve projections about future events that could impact the fund’s performance.
Questions About Risk Disclosure Practices
Investigations have revealed concerns about how some financial professionals presented FS Energy & Power Fund to investors. Financial advisors must ensure that any investment recommendation aligns with the investor’s investment experience. Some advisors may not have fully explained the volatility and liquidity characteristics associated with this investment.
Research indicates some financial professionals received significant commissions while potentially providing incomplete information about important risk factors. The fund’s performance history shows a cumulative total return of -16.32% since inception.
This performance trajectory was acknowledged by leadership. In November 2018, FS Investments’ CEO Michael Forman publicly addressed operational challenges and performance issues.
Financial advisors have a professional obligation to thoroughly disclose all investment risks to their clients. The Securities Exchange Commission maintains requirements for transparency regarding investment products. Many FSEP investors now face substantial financial impacts that may relate to potential FINRA rule violations regarding proper risk disclosure.
These representation issues created expectations about the fund’s stability and potential returns that may not have aligned with actual performance. Investors who received potentially inappropriate advice or incomplete information about FSEP may qualify for recovery through claims with the Financial Industry Regulatory Authority.
Concentration Issues in Client Portfolios
Beyond disclosure concerns, some financial advisors created portfolios with significant allocations to FS Energy & Power Fund. Broker dealers and brokerage firms must ensure that client portfolios are diversified and suitable for the investor’s financial profile. Investigations show some advisors recommended substantial positions in these investments.
FSEP has experienced considerable market value fluctuation, yet some advisors continued recommending these products to clients who required stable, accessible funds. Such practices may conflict with FINRA rules regarding suitable investment recommendations.
Financial firms face questions about portfolio concentration in private placements like FSEP. These investments have different regulatory requirements and liquidation options than more traditional investments.
Haselkorn & Thibaut investigates concerns about FSEP recommendations. Many investors may not have fully understood the liquidity limitations of these investments. Investment firms must diversify client portfolios based on individual financial circumstances rather than commission structures from alternative investment sales.
Recovery Options for Affected Investors
Investors who experienced losses with FS Energy & Power Fund have potential avenues to address their situation. Investors may seek to recover investment losses through legal actions. Haselkorn & Thibaut assists clients in pursuing FINRA claims against financial advisors who may have recommended unsuitable investments, leading to substantial losses.
Individual FINRA Arbitration Claims
FINRA arbitration provides a potential path to recovery for FS Energy and Power Fund investors who experienced losses. Haselkorn & Thibaut helps clients file these claims based on potential advisor misconduct such as unsuitable investment recommendations or incomplete risk information.
In May 2017, a retired investor filed a federal FINRA claim regarding potential misrepresentation of FSEP investments. This process allows investors to seek potential compensation without traditional court proceedings. The Securities and Exchange Commission oversees the arbitration process.
The legal team at Haselkorn & Thibaut guides FSEP investors through the arbitration process from beginning to end. Many clients are unaware they can address concerns about their brokerage firm through FINRA.
Indicators that may support a potential claim include significant investment losses and advisors who may have characterized illiquid investments as conservative options. The securities exchange act contains provisions to protect investors from such situations, and FINRA provides the forum to address these matters. Financial advisors must consider the investor’s financial needs when making investment recommendations.
Legal Options for Recovery
Legal actions have helped many FS Energy & Power Fund investors address their situations since 2021. These legal proceedings often focus on the risk profile of FSEP investments that some financial advisors may not have fully explained. These actions aim to maximize shareholder value.
These cases examine whether investment advisors properly considered client suitability when recommending these products. Haselkorn & Thibaut monitors how these cases highlight potential conflicts of interest where advisors recommended FS Investments funds like FSIC II, FSIC III, FSIC IV, and CCT II without comprehensive risk disclosure.
Legal proceedings allow affected investors to seek resolution with financial institutions in a structured format.
Haselkorn & Thibaut specializes in representing FSEP investors seeking potential compensation for losses through established legal channels. The evaluation process typically examines whether financial advisors properly disclosed the liquidity characteristics of these alternative investments.
Most claims center on representation, risk disclosure, and concentration issues that contributed to investment losses. The cases also investigate the suspension of share repurchase programs and distributions that affected investor liquidity. These actions focus on enhancing shareholder returns through legal avenues.
Don’t Wait – Time Is Limited To Recover Your Losses
FS Energy & Power Fund investors now face critical decisions following devastating losses and suspended distributions. Thousands of investors have already secured compensation through FINRA arbitration claims against financial advisors who failed to disclose crucial investment risks. Many investors are seeking legal support due to unsuitable recommendations from their financial advisor.
Our ongoing investigations continue to uncover evidence that many financial advisors disregarded their fiduciary duties when recommending these high-risk, illiquid investments. Significant recovery opportunities exist for investors affected by FSEP’s catastrophic decline from $10 to $3.25 per share.
The experienced investment fraud attorneys at Haselkorn & Thibaut are offering completely free, no-obligation case evaluations to all affected FSEP investors nationwide. But strict legal deadlines apply to these claims – waiting could permanently forfeit your recovery rights.
Contact Haselkorn & Thibaut Today – Free Consultation
Have you lost money in FS Energy & Power Fund? Many investors have suffered due to unsuitable investment recommendations from their brokerage firms. The nationally-recognized securities attorneys at Haselkorn & Thibaut may be able to help you recover your investment losses through FINRA arbitration.
Call our Investment Fraud Hotline now at 1-888-885-7162 to schedule your 100% confidential, free consultation.
Haselkorn & Thibaut has recovered millions for investors nationwide who received unsuitable investment recommendations from their financial advisors.
ACT NOW – Legal deadlines are approaching. Our experienced team is standing by to help you understand your rights and fight for the compensation you deserve.
