Please list your purchase and sale transaction(s) in the Fifth Street Finance Corp. (Nasdaq: FSC) security that is subject of this action during the Class Period (between July 7, 2014 and June 25, 2015):
Notice is hereby given that a class action lawsuit has been filed on behalf of those who purchased or otherwise acquired shares of Fifth Street Finance Corp. (Nasdaq: FSC) (“Fifth Street”) between July 7, 2014 and February 6, 2015, inclusive (the “Class Period”).
According to the complaint, Fifth Street is a specialty finance company that lends to and invests in small and mid-sized companies, primarily in connection with investments by private equity sponsors. Fifth Street Asset Management (“FSAM”) is the asset manager and investment advisor for Fifth Street, and annually receives millions of dollars for providing investment advisory services to Fifth Street. During October 2014, FSAM (Nasdaq: FSAM) completed its initial public offering (“IPO”) of common stock by selling 6 million shares of stock to investors at $17.00 per share, for proceeds of over $100 million.
The Complaint alleges that Fifth Street and certain of its executive officers made a series of false and misleading statements during the Class Period, and failed to disclose material adverse facts about the Company’s business, operations, and prospects. Among other things, the Complaint alleges that the defendants: (i) pushed Fifth Street into increasingly risky, speculative investments at unsustainable leverage levels, and delayed writing down impaired investments in order to create the appearance of increasing revenues for FSAM; (ii) actively concealed the deteriorating credit quality of Fifth Street’s portfolio and delayed the recognition of write-downs and investment losses until after FSAM completed its IPO; and (iii) systematically overstated the income generated by Fifth Street’s investments and the fair value of its portfolio.
On February 9, 2015, Fifth Street reported its financial and operational results for the quarter ended December 31, 2014. As more fully detailed in the Complaint, for the quarter Fifth Street reported that it had moved $106 million worth of investments to non-accrual status with an additional $17 million likely to be designated as non-accrual in the subsequent quarter. Fifth Street also reported that the Company’s net investment income had decreased by 6% compared to the prior quarter, and that it would not issue a dividend for February 2015.
On this news, shares of Fifth Street’s common stock declined $1.27 per share, or almost 15%, to close on February 9, 2015 at $7.22 per share, on heavy trading volume.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP.
Kessler Topaz Meltzer & Check, LLP
James Maro, Esq.
Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
1-888-299-7706 (toll free) or 1-610-667-7706