Prospect Capital Corporation (Nasdaq: PSEC)
A class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of a class (the “Class”) comprising all purchasers of Prospect Capital Corporation (Nasdaq: PSEC) securities between August 21, 2013 and May 6, 2014, inclusive (the “Class Period”).
Prospect is a financial services company that primarily lends to and invests in middle-market privately held companies. The Complaint alleges that, throughout the Class Period, defendants misrepresented and/or failed to disclose that:
Certain of Prospect’s wholly owned companies were investment companies for accounting purposes that were required to be consolidated by the Company. Certain of Prospect’s wholly owned holding companies should have been accounted for as investment companies.
The Company’s reported investment income and financial results were misstated.
The Company’s internal and financial controls were inadequate.
The Company’s financial statements were materially false and misleading at all relevant times.
On May 6, 2014, the Company disclosed that the staff of the Securities and Exchange Commission has asserted that certain of Prospect’s wholly owned companies are investment companies for accounting purposes and must be consolidated. The Company further disclosed that it may need to restate its prior financial statements to resolve the issue, and that one potential effect of a restatement would be to decrease the Company’s historical net investment income by the amount of interest and structuring income paid by such wholly owned companies in excess of the amount of income that may be reported as dividend income based on taxable earnings and profits. Following this news, the price of Prospect shares declined $0.54 per share, to a closing price of $10.20 per share on May 7, 2014, on unusually heavy volume.
If you are a current shareholder and/or purchased stock between August 21, 2013 and May 6, 2014 and would like to discuss your options of exercising your rights as a shareholder, please contact us.
Please submit the following information so we can determine if you qualify for the suit. If you don't know all the specific details, partial information is also acceptable.