Investor Alleges Their Accounts Were Overconcentrated in Illiquid Investments

NEW YORK, NEW YORK, USA, March 17, 2022 /EINPresswire.com/ -- MDF Law PLLC announces the filing of a FINRA complaint involving the overconcentration of an investor’s account in FS Energy & Power Fund as well as other non-traded REITs. The FINRA arbitration complaint was filed against Madison Avenue Securities, Case No. 22-00554.

FS Energy & Power Fund was a high-risk business development company. According to the Securities and Exchange Commission, business development companies are “closed-end funds that are operated for the purpose of making investments in small and developing businesses and financially troubled businesses.” The FINRA arbitration complaint filed by MDF Law alleges that investors’ IRA accounts were concentrated in FS Energy & Power Fund as well as other illiquid investments, including non-traded REITs. The investors were elderly retirees with a moderate risk tolerance. Due to the customers’ ages, FINRA granted MDF Law’s request for expedited treatment of the case.

The complaint was filed with the Financial Industry Regulatory Authority, or FINRA, which administers arbitration lawsuits nationwide between financial professionals and investors. Arbitration complaints filed with FINRA are generally resolved in approximately one to two years. According to statistics released by FINRA, most complaints settle prior to a final arbitration hearing. MDF Law exclusively represents investors before FINRA. If you or someone you know lost money investing in FS Energy & Power Fund, call us at 800-767-8040 to speak with an attorney for free.

Under FINRA’s rules, financial advisors and stockbrokers must recommend investments that are suitable for their customers. “Suitability” is determined on a case-by-case basis depending on an investor’s age, risk tolerance and sophistication. In addition to recommending suitable investments, financial professionals are also legally obligated to truthfully disclose all important risks of an investment. For illiquid private placements, these risks include high fees, complete loss of principal and indefinite periods of illiquidity. Unfortunately, many investors in illiquid investments, like REITs and BDCs, are unaware of these basic risks.

You may be able to file an arbitration case to recover investment losses if any of the following apply to you:

• You lost money investing in FS Energy & Power Fund or other illiquid private investments, including non-traded REITs, other business development corporations or variable annuities.

• You were unaware of the significant risks of the investments, including the high fees, indefinite period of illiquidity and possibility of complete loss of principal.

• Your investment was a significant portion of your net worth. For example, the investment was recommended in an IRA account or was money you could not otherwise afford to lose.

• Your portfolio is not diversified.

If any of the foregoing apply to you, you may be able to pursue a FINRA arbitration against the salesperson who marketed FS Energy & Power Fund, or other similar investments to you. Please call 800-767-8040 to speak with an attorney. Our attorneys works on contingency, which means that we do not earn a legal fee unless we are successful on our client’s behalf.

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Marc Fitapelli
MDF Law
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