Faruqi & Faruqi, LLP’s national practice focuses on complex civil litigation. The firm practices in the areas of Securities, Merger & Transactional, Shareholder Derivative, Antitrust, Consumer Class Action, and Wage & Hour litigation.
Friday, January 22, 2016
Faruqi & Faruqi Alert: Fifth Street Asset Management Inc.
The lawsuit claims that the Company and its executives violated federal securities laws by issuing false and misleading statements and filing documents omitting information in connection with the Company’s IPO.
Specifically, since the IPO was completed, Fifth Street Finance Corp. (“FSC”), a publicly traded asset portfolio company under FSAM, announced that a substantial portion of its debt portfolio had entered non-accrual, including $4.2 billion it manages for FSAM. This led to FSC being downgraded by Fitch Ratings Inc. from BB+ from BBB- on a negative outlook due largely to FSAM’s poor management of FSC and its credibility problems with investors. Since the announcement, FSC has had to reissue financials for three consecutive quarters.
The share price has fallen from its $17.00 per share IPO price to a $4.03 per share closing price on December 9—a 76% drop.