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FS KKR Capital Corp. II (FSKR) Securities Investigation

06-24-2020 09:50 AM CET | Business, Economy, Finances, Banking & Insurance

Press release from: The White Law Group

The White Law Group announces a securities investigation involving FS KKR Capital Corp. II
The White Law Group, LLC is investigating the liability brokerage firms may have for recommending FS KKR Capital Corp. II to investors.

FS KKR Capital Corp. II is a business development company (BDC) reportedly “designed to provide a high level of current income.” The fund was launched at the end of 2019 as the product of a merger of four non-traded BDCs –FS Investment Corporation II (FSIC II), FS Investment Corporation III (FSIC III), FS Investment Corporation IV (FSIC IV) and Corporate Capital Trust II (CCT II).

The company has reportedly listed its shares of common stock on the New York Stock Exchange under the ticker symbol “FSKR.” On June 10, 2020, FSKR affected a 4 to 1 reverse split of its shares of common stock which resulted in every four shares of FSKR common stock issued and outstanding were automatically combined into one share of FSKR common stock, and the number of outstanding shares was reduced from approximately 691.2 million to approximately 172.9 million.

Due to the reverse stock split, FSKR's net asset value per share as of March 31, 2020 would have been $24.68, instead of $6.17 per share. Shares of FSKR closed at $13.97 on Friday.

The White Law Group has handled a number of claims involving FSIC II, FSIC III and FSIC IV, (now known as FS KKR Capital Corp. II.) In those claims, the firm has alleged, among other things, that the investment is (1) high-risk and unsuitable for our clients given their financial situation, needs and investment objectives, (2) that the risks of the investment were not fully disclosed to them, and (3) that the brokerage firms that sold the investments failed to conduct the proper due diligence with respect to the investments.

Unfortunately, some brokers may have downplayed the risks associated with these non-traded BDCs. They have misled investors into thinking that they are “safe” investment products.

The high sales commission brokers earned for selling such products may provide some brokers with enough incentive to push the product to unsuspecting investors. Your typical stock or mutual fund offers 1%-2% commission. The commission for non-traded BDCs like FS KKR Capital Corp. II, are often 7% - 10%.

“Broker dealers are required to inform clients of the risks associated with investment recommendations and to ensure that those recommendations are suitable for the investor in light of the investor’s age, risk tolerance, net worth, and investment experience. says D. Daxton White, Managing Partner of The White Law Group.  “These types of investments are unsuitable for many investors. Brokerage firms may be held liable for losses if they overlooked suitability requirements or failed to disclose the risk when recommending FSKR to clients.”

To determine whether you may be able to recover investment losses incurred as a result of your purchase of FS KKR Capital Corp. II, please contact The White Law Group at 1-888-637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm. The firm has offices in Chicago, Illinois and Franklin, Tennessee.
For more information on The White Law Group, please visit our website at www.whitesecuritieslaw.com.

The White Law Group
125 S. Wacker Drive, Suite 300,
Chicago, Illinois 60606
(888) 637-5510

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Franklin, Tennessee.

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