Investors in Franklin Square Energy and Power Fund (“FSEP”) may have FINRA arbitration claims, if their investment was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented by the stockbroker or advisor.
FSEP was launched in July 2011 as a closed-end management investment company that operates as a business development company, or BDC. FSEP invests in energy and power companies, including natural gas, natural gas liquids, crude oil, coal, and other types of power. FSEP closed to new investors in November 2016.
Investors who purchased shares in FSEP through the offering acquired shares at $10.00 per share, but according to its sponsor FESP had an estimated net asset value (“NAV”) of $3.32 per share as of September 20, 2020. . Even worse, shares on the limited secondary market have reportedly traded at lower prices of between $1.10 and $1.27 per share.