FS Energy and Power Fund Sales Practices by Investment Professionals Investigated by Securities Lawyers

Cleveland stockbroker fraud lawyerThe investors’ rights attorneys at Peiffer Rosca Wolf are investigating Franklin Square Capital Partners’ FS Energy and Power Fund (“FSEP”) sale practices of certain investment professionals who recommended and sold FSEP to their customers.

FSEP is a non-traded business development company that invests in the debt of private U.S. energy and power companies, and according to Franklin Square is designed to provide investors with access to alternative asset classes that are typically only available to the very biggest institutional investors.

As with other alternative investments, FSEP presents inherent risks associated with the reduced oversight of unregistered securities, as well as the frequently high sales commissions and due diligence fees, which can provide brokers with an incentive to sell them without looking too closely at their finances, to investors who may not understand the inherent risk of the product.

Peiffer Rosca Wolf Lawyers Investigating Broker Sales of FSEP Products to Investors

On occasion, the Peiffer Rosca Wolf lawyers believe some brokers may have misrepresented the investment to sell more of it, or improperly recommend excessive or otherwise unsuitable FSEP investment products to their customers.

Investment professionals have a duty to only recommend suitable investments to their customers. To determine whether a product is suitable, the broker must first conduct adequate due diligence as to that investment and have a reasonable basis to recommend it. Additionally, a broker’s investment recommendations must take into account the investor’s risk profile and expectations and investment experience.  Brokers may not recommend risky investments to investors unwilling or unable to accept high risks.  Lastly, investment professionals may not typically recommend excessive quantities of one single investment product, which could result in an improperly high risk concentration in an investor’s portfolio.

FSEP closed to new investors on November 17, 2016. On December 30, 2016 FSEP increased its share issue price under the distribution reinvestment plan in order to ensure that shares were not issued at a price below the net asset value.

FSEP Investors May Contact Peiffer Rosca Wolf Securities Lawyers

Securities litigation attorneys Alan Rosca and James Booker of the Peifer Rosca Wolf law firm are currently investigating FSEP. Investors who believe they may have lost money investing in FSEP or other business development companies may contact the investors’ rights attorneys at Peiffer Rosca Wolf for a free evaluation of your potential claim.

The Peiffer Rosca Wolf lawyers typically take investor cases on a contingency fee basis, advance case expenses, and only get paid for their fees and expenses if and when they recover money for their customers.  For a free, no obligation evaluation of their legal options, FSEP investors may contact attorneys Alan Rosca and James Booker, toll free at 1.888.998.0520 or via email at arosca@prwlegal.com.

Alan Rosca (1169 Posts)

Alan is a securities lawyer. He also teaches Securities Regulation at the Cleveland-Marshall College of Law. He focuses his legal practice on complex commercial and financial litigation and arbitration, particularly in the areas of securities and investment fraud. His office is in Cleveland, Ohio.


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