New York–(BUSINESS WIRE)–National investment fraud law firm, KlaymanToskes (“KT”), continues its investigation into full-service brokerage firms for the unsuitable recommendations to purchase non-traded Business Development Companies (“BDCs”) including: FS Investment Corp II (“FSIC II”), FS Investment Corp III (“FSIC III”), FS Investment Corp IV (“FSIC IV”), and Corporate Capital Trust (“CCTII”). These four BDCs merged into the Franklin Square KKR Capital II Fund (NYSE:FSKR) on December 18, 2019. On June 17, 2020, FSKR announced the listing on the NYSE. These investments, and other non-traded BDCs, may have been marketed and sold to investors who were risk averse, such as retirees or other conservative investors, that were seeking income and capital preservation and were not explained the potential risks.
As a result of the IPO, FSKR investors can liquidate their investments in previously non-traded BDCs at prices considerably lower than the initial offering price. According to securities attorney, Lawrence L. Klayman, “many investors are unable to understand the risks associated with BDCs and must rely upon brokerage firms and financial advisors to provide suitable investment advice. Financial advisors who failed to disclose all relevant facts, including risks related to the use of leverage and high level of management fees and commissions increased the breakeven rate of return which required the assumption of greater risk in the loan portfolio .”
The sole purpose of this release is to investigate investment recommendations provided by full-service brokerage firms prior to the merger of FSIC II, FSIC III, FSIC IV, and CCTII, which now trades on the NYSE into FSKR and other like investments. FSKR investors with accounts at full-service brokerage firms, and have information relating to the handling of their investment portfolios are encouraged to contact Lawrence L. Klayman, Esq., at (561) 542-5131, and download our Special Investor Report.