PHILADELPHIA, Jan. 12, 2016 (GLOBE NEWSWIRE) -- Barrack Rodos & Bacine announces that a securities class action lawsuit has been filed in the United States District Court for the District of Connecticut on behalf of purchasers of the common stock of Fifth Street Asset Management, Inc. (NASDAQ: FSAM ) (“FSAM” or the “Company”) issued in and/or traceable to the Registration Statement and Prospectus for FSAM’s October 30, 2014 initial public offering (“IPO”).
FSAM, which is headquartered in Greenwich, Connecticut, is the investment advisor for Fifth Street Finance Corp. (“FSC”) and certain other Fifth Street entities. The lawsuit alleges that the offering documents filed in connection with the IPO contained materially false and misleading statements and omissions, including that: (i) FSAM had $4.2 billion in assets under management from FSC as of June 30, 2014, when in fact a material portion of FSC’s portfolio was impaired and should have been placed on non-accrual prior to the IPO; (ii) that FSAM’s purportedly “strong growth in assets under management” and “outstanding investor performance” was fueled, in part, by delaying the write down of impaired investments in FSC’s portfolio; and (iii) FSC had a material weakness in its controls over financial reporting.
After the IPO, FSC announced in February 2015 that several investments representing nearly 5% of its debt portfolio had been or would likely be placed on non-accrual status and that it was suspending dividend payments. In December 2015, FSC disclosed a material weakness in its internal controls over financial reporting and acknowledged certain accounting errors in the recognition of fee income for the fiscal years ended 2012 through 2015. FSC has received ratings downgrades, and a large shareholder has sought the termination of its advisory agreement with FSAM.
As a result of these developments, the price of FSAM stock has declined significantly, closing at $3.44 per share on the date the complaint was filed. The lawsuit seeks to recover damages on behalf of all purchasers of FSAM stock issued in or traceable to the Registration Statement and Prospectus for FSAM’s IPO.
If you wish to serve as lead plaintiff, you must move the Court no later than March 7, 2016. To discuss your rights regarding the appointment of lead plaintiff and for additional information about your interest in this class action, please contact Barrack Rodos & Bacine, at the following toll-free number: 877-386-3304, or via e-mail to Robert A. Hoffman ( rhoffman@barrack.com ) or Stephen R. Basser ( sbasser@barrack.com ).
