RADNOR, Pa., Jan. 14, 2016 /PRNewswire/ -- The law firm of
Kessler Topaz Meltzer & Check, LLP announces that a shareholder
class action lawsuit has been filed against Fifth Street Asset
Management, Inc. (Nasdaq: FSAM) ("FSAM" or the "Company") on behalf
of purchasers of the Company's securities in connection with and
following FSAM's Initial Public Offering ("IPO") on or around
October 30, 2014.
FSAM shareholders who wish to discuss this action and their
legal options are encouraged to contact Kessler Topaz Meltzer &
Check, LLP (Darren J. Check, Esq.,
D. Seamus Kaskela, Esq. or
Adrienne O. Bell, Esq.) at (888)
299-7706 or at info@ktmc.com.
For additional information about this lawsuit, or to request
information about this action online, please visit
https://www.ktmc.com/new-cases/fifth-street-asset-management-inc.
FSAM is the asset manager and investment advisor for two
publicly traded asset portfolio companies – Fifth Street Finance
Corp. (Nasdaq: FSC) ("FSC") and Fifth Street Senior Floating Rate
Corp. (Nasdaq: FSFR) ("FSFR"). FSC and FSFR (the "Funds") lend to
and invest in small and mid-sized companies in connection with
investments by private equity sponsors. FSAM generates revenue
from the Funds for providing investment advisory and administrative
services.
According to the shareholder class action complaint, the
Offering Documents filed in connection with FSAM's IPO contained
materially false and misleading statements of fact and failed to
disclose facts necessary to make the statements made therein not
misleading, including, among other statements, that: (i) FSAM had
$4.2 billion assets under management
from FSC as of June 30, 2014, when in
fact a substantial portion of FSC's portfolio had been impaired on
a cost basis prior to the IPO; (ii) FSAM had increased its
management fee revenues by a compound annual growth rate of nearly
50% year-over-year during the six months ended June 30, 2014 due to FSAM's "outstanding
performance," when in fact the growth in fee revenue was largely
due to the overstatement of FSC's assets and dilutive stock
offerings detrimental to the Funds' shareholders; and (iii) FSAM
had "high-quality and predictable earnings," when in fact FSAM's
revenues were unsustainable and the result of conduct that placed
FSAM's most important asset – its management contract with FSC – at
risk.
As further detailed in the complaint, since the time of
Company's IPO in October 2014, the
price of FSAM shares has plummeted because, among other reasons:
(i) FSC disclosed that a substantial portion of its debt portfolio
had entered non-accrual (including about 4% of FSC's portfolio
prior to the IPO); (ii) Fitch Ratings Inc. downgraded FSC to BB+
from BBB- on a negative outlook due largely to FSAM's poor
management of FSC and its credibility problems with investors; and
(iii) FSC has had to restate its financials for three consecutive
quarters, including the quarter in which the IPO was conducted, due
to material weakness in its controls over financial reporting.
On December 9, 2015, FSAM stock
closed at $4.03 per share, more than
76% below the price of the shares at the time of the IPO.
FSAM shareholders who purchased their securities during
the Class Period may, no later than March 7,
2016, petition the Court to be appointed as a lead plaintiff
of the class.
A lead plaintiff is a representative party who acts on behalf of
other class members in directing the litigation. Members of the
purported class may petition the Court to be appointed as a lead
plaintiff through Kessler Topaz Meltzer & Check or other
counsel, or may choose to do nothing and remain an absent class
member. In order to be appointed as a 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 in the action. Your ability to share
in any recovery is not affected by the decision of whether or not
to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check prosecutes class actions in
state and federal courts throughout the country. Kessler Topaz
Meltzer & Check is a driving force behind corporate governance
reform, and has recovered billions of dollars on behalf of
institutional and individual investors from the United States and around the world. The
firm represents investors, consumers and whistleblowers (private
citizens who report fraudulent practices against the government and
share in the recovery of government dollars). The complaint in
this action was not filed by Kessler Topaz Meltzer &
Check. For more information about Kessler Topaz Meltzer &
Check, or for additional information about participating in this
action, please visit www.ktmc.com.
CONTACT:
Kessler Topaz Meltzer & Check, LLP
Darren J. Check, Esq.
D. Seamus Kaskela, Esq.
Adrienne O. Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
(888) 299-7706
(610) 667-7706
info@ktmc.com
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SOURCE Kessler Topaz Meltzer & Check, LLP