FS Investment Corporation III – Goodman & Nekvasil, P.A., May Recover Investor Losses

Goodman & Nekvasil, P.A., May Recover Investor Losses – FS Investment Corporation III

FS Investment Corporation III is, according to Bloomberg, a business development company specializing investments in floating rate senior secured loans, subordinated debt and selected equity, second lien secured loans, debt investments, such as warrants or options as additional consideration, corporate bonds, unsecured loans, CLOs, and other debt securities in middle-market companies. 

According to FS Investment Corporation III’s prospectus: Investing in FSIC III may be considered speculative and involves a high level of risk, including the risk of a substantial loss of investment. The following are some of the risks an investment in FSIC III’s common stock involves; however, you should carefully consider all of the information found in the section of FSIC III’s prospectus entitled “Risk Factors” before deciding to invest in shares of FSIC III’s common stock.

  • Because there is no public trading market for shares of FSIC III’s common stock and FSIC III is not obligated to effectuate a liquidity event by a specified date, if at all, it is unlikely that you will be able to sell your shares. If you are able to sell your shares before FSIC III completes a liquidity event, it is likely that you will receive less than you paid for them. While FSIC III intends to conduct quarterly tender offers for FSIC III’s shares, only a limited number of shares will be eligible for repurchase and FSIC III may amend, suspend or terminate the share repurchase program at any time.
  • FSIC III invests in securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. Below investment grade securities, which are often referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. They may also be difficult to value and illiquid.
  • FSIC III’s distributions may be funded from unlimited amounts of offering proceeds or borrowings, which may constitute a return of capital and reduce the amount of capital available to FSIC III for investment. Any capital returned to stockholders through distributions will be distributed after payment of fees and expenses.
  • An investment strategy focused primarily on privately held companies presents certain challenges, including lack of available information about these companies.
  • Investing in middle market companies involves a number of significant risks, any one of which could have a material adverse effect on FSIC III’s operating results.
  • A lack of liquidity in certain of FSIC III’s investments may adversely affect its business.
  • FSIC III is subject to financial market risks, including changes in interest rates, which may have a substantial negative impact on its investments.
  • FSIC III has borrowed funds to make investments, which increases the volatility of its investments and may increase the risks of investing in its securities.
  • FSIC III has limited operating history and is subject to the business risks and uncertainties associated with any new business.

Goodman & Nekvasil, P.A., a Clearwater, Florida, law firm with a national practice representing victimized investors, continues to investigate brokerage firms that placed elderly retirees and other conservative investors in high-risk investments such as FS Investment Corporation III.

Goodman & Nekvasil, P.A., has filed hundreds of cases against brokerage firms selling high-risk investments such as FS Investment Corporation III and has recovered more than $180 million dollars on behalf of victimized investors.  We allege in these cases that these investment recommendations were unsuitable for our clients in view of their financial situation, needs and investment objectives.  All our cases are handled on a purely contingency fee basis.

You may have the right to recover your losses from the brokerage firm that sold FS Investment Corporation III and other high-risk investments to you. We strongly recommend that you act quickly, however, because statutes of limitation can be short in securities cases.

Kalju Nekvasil, Esq., formerly regional counsel with the NASD, now known as FINRA, has practiced in this area of the law for more than 35 years. We would like to discuss the possibility of your retaining our firm to represent you in an arbitration action.

There is no charge for an evaluation of your case. Further, we handle our cases on a contingency fee basis. This means that unless we recover money for you, we charge no attorney’s fee. Unless you recover any money, you pay us nothing, not even the costs and expenses which the firm will advance on your behalf. Finally, the filing of such a case should not affect your ownership of these investments in any way.

If you incurred losses on your investment in FS Investment Corporation III and/or other high-risk investments and would like your case evaluated by a securities attorney (again, there is no charge for an evaluation and all cases are handled on a purely contingency fee basis), please contact us.   


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