Stoltmann Law Offices is interested in talking to those individuals who may have investment losses in FS Energy & Power Fund, which is a business development company (BDC). According to the company’s website, it is a non-traded BDC that invests primarily in the debt, and, to a lesser extent, equity securities of private U.S. energy and power companies. This is a non-traded product so there is no market pricing for the value of its securities. BDCs, much like direct participation products (DPPs), real estate investment trusts (REITs), private placements and others, are alternative investments that may not be suitable for all investors because of their highly illiquid and risky nature. A broker must only recommend those securities that are suitable for his clients by taking into account their age, net worth, investment risk tolerance and other factors. If he does not, his brokerage firm may be liable for losses. Investments like FS Energy & Power Fund are in the oil, gas and energy sector, which, by nature, are highly risky and illiquid funds only for sophisticated investors who can withstand much risk. They are typically not suitable for the unsophisticated investor who cannot withstand risky investments.
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