National investment loss lawyers KlaymanToskes is investigating brokerage firms and financial advisors who unsuitably recommended investments in Franklin Square Energy & Power Fund (a/k/a FS Specialty Lending Fund) to their customers, when the investment was illiquid for a share price of $10. Recently, the fund has lost over 60% of its market value, and our firm believes many investors may have been misled regarding the risks and liquidity issues associated with FS Investments’ private placement offering.
In addition to Franklin Square Energy & Power (“FSEP”), KlaymanToskes is investigating brokerage firms and financial advisors who recommended the following FS Investments funds:
If your financial advisor recommended an unsuitable Real Estate Investment Trust (“REIT”) or Business Development Company (“BDC”) based on your investment profile, or disregarded your risk-tolerance when making investment recommendations, you may be entitled to a financial recovery through FINRA arbitration.
If you suffered losses in Franklin Square Energy & Power, or any other FS Investments funds due to unsuitable recommendations by your brokerage firm or financial advisor, contact securities attorney Steven D. Toskes to discuss your recovery options at (888) 997-9956 or investigations@klaymantoskes.com for a free and confidential consultation. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
Franklin Square Energy & Power Fund (FSEP) is a non-traded Business Development Company (“BDC”) sponsored by FS Investments. The fund is a private placement investment that primarily invests in debt and equity securities in the energy and power sector. On September 29, 2023, FS Energy & Power Fund was renamed FS Specialty Lending Fund (FSSL). The fund’s cumulative total return since inception (with sales charges) is -16.32%.
FSEP has faced a number of challenges recently, including the suspension of its share repurchase program (“SRP”), redemption difficulties for investors, and continued instability of its share price. As of January 31st 2024, the fund’s Net Asset Value (NAV) is $3.64 per share, representing a 63% decrease from its initial offering price of $10 per share. Additionally, according to Central Trade and Transfer, a secondary market for alternative investments, shares of FSEP were recently sold for only $2.15 per share, which may indicate further losses for investors.
Franklin Square Energy & Power Fund (FSEP) is a high-risk, illiquid, private placement investment. Private placements or “Reg D” offerings can be highly volatile investments, as they are early-stage companies with limited information and are not bound to the same Securities Exchange Commission (“SEC”) disclosure requirements as public investment offerings. Financial professionals and their firms have an obligation to conduct adequate due diligence on investment offerings prior to making recommendations to their customers, in addition to having a fiduciary duty to recommend suitable investments that are in their customer’s best interest.
In its “risk factors disclosure” FS Investments states that “FSEP is a long-term investment for persons of adequate financial means who have no need for liquidity in their investment.” The brokers and financial advisors responsible for selling FS Investments funds may be held responsible for any financial losses sustained by investors.
KlaymanToskes is a leading national securities fraud law firm that represents the interests of investors throughout the world who have suffered losses due to broker misconduct, investment fraud, and securities violations.
The article linked below contains important information relating to KlaymanToskes’ investigations of Franklin Square Energy & Power Fund, and related investments:
If you suffered losses in Franklin Square Energy & Power, or any other FS Investments funds at a full-service brokerage firm, contact securities attorney Lawrence L. Klayman to discuss your recovery options at (888) 997-9956 or fill out a short contact form for a free and confidential consultation.
The firm has helped recover over $600 million for investors (exclusive of attorneys fees and costs), and can help you determine if your loss is due to financial advisor misconduct, unsuitable investment advice, and/or other securities violations.
Potential conflicts of interest may arise when issuers incentivize brokers/investment advisors with substantial commissions to promote their financial products. A problem often associated with alternative investment recommendations, such as Non-Traded BDCs and REITs, is the high sales commissions brokers typically earn for selling these investments, which can be as high as 15%. A representative that recommends investments for the purpose of being compensated through increased commissions, and enriches themselves rather than benefiting the client, is violating securities laws.
To recover investment losses, you generally won’t go through the traditional court system with a lawsuit. The correct path is through FINRA arbitration, a specific process designed for these types of disputes. It involves presenting your case to a panel set by the Financial Industry Regulatory Authority (FINRA), not a courtroom. This approach is streamlined and focused on investment disputes, making it a suitable and effective way for investors to seek compensation for losses caused by financial advisors or brokerage firms.
FINRA (the Financial Industry Regulatory Authority) is a self-regulatory organization that oversees brokers and brokerages. In the event of a dispute between an investor and their financial advisor, investors can choose to file a FINRA arbitration claim. FINRA is overseen by the Securities and Exchange Commission (“SEC”).
The arbitration process is designed to be much faster than the court system and allows both parties to present their case before a panel of arbitrators. The arbitrators will then decide how to resolve the dispute, including ordering the advisor to pay damages for any losses suffered by the investor.
If you need help filing a FINRA arbitration claim to recover losses from investments in Franklin Square Energy & Power Fund or any other FS Investments funds, you are encouraged to contact attorney Lawrence L. Klayman, Esq., at 888-997-9956 or by email at lawrence@klaymantoskes.com to discuss recovery options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
As an investor, there are signs that you should look out for if you believe you have a claim against your broker/advisor for unsuitable investment recommendations in FS Investments, including FSEP. These signs could potentially indicate misconduct, negligence, or investment fraud. Investors are encouraged to contact our firm immediately if you have experienced any of the following:
Some investors have close relationships with their brokers due to the time and trust built over the course of their investment relationship. However, it is crucial to remember that financial decisions should be based on careful analysis and due diligence rather than solely relying on personal relationships.
Engaging the services of an experienced securities attorney to evaluate your specific circumstances is strongly advised. At KlaymanToskes, our team of experienced securities attorneys has a deep understanding of this complex area of law, allowing us to provide invaluable insight and tailored guidance that directly addresses your individual needs.
If you purchased unsuitable Franklin Square Energy & Power investments, or any other FS Investments funds through your financial advisor/brokerage firm, and suffered significant losses, contact KlaymanToskes at 888-997-9956 or fill out a short contact form for a free and confidential consultation.