January 12, 2016 – Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) has been investigating Fifth Street Asset Management, Inc. (“FSAM” or the “Company”) (NASDAQ: FSAM). FSAM is a credit-focused asset manager and the investment advisor for Fifth Street Finance Corp. (“FSC”), Fifth Street Senior Floating Rate Corp. (“FSFR”), and various private Fifth Street funds. Investors who purchased shares of FSAM common stock in the Company’s October 29, 2014 initial public offering (“IPO”) or since the IPO may be affected.
A class action complaint has been filed in the United States District Court for the District of Connecticut on behalf of purchasers of FSAM common stock who purchased shares in or traceable to the IPO.
On October 29, 2014, FSAM sold 6 million shares at $17 per share in its IPO, generating more than $100 million in gross proceeds.
The complaint alleges that the offering documents filed in connection with the IPO contained materially false and misleading statements of fact and failed to disclose facts necessary to make statements made in the offering documents not misleading, including, among other things, 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; 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.
On November 17, 2015, FSAM filed a notice with the Securities and Exchange Commission (the “SEC”) on Form NT stating that it would be unable to timely file its financial results for the quarter ended September 30, 2015. The November 17, 2015 SEC filing also states that the Company requires information from FSC and FSFR that is not yet available due to reviews being performed by FSC and FSFR for their fiscal years ended September 30, 2015. On November 17, 2015, shares of FSAM common stock declined by $1.57 per share, more than 25%, to close at $4.61 per share.
On November 23, 2015, FSAM issued a press release announcing its financial results for the quarter ended September 30, 2015. The press release also disclosed that FSAM had identified adjustments in the calculation of management fees previously paid to FSAM by FSC and FSFR, and that $3.3 million in management fees from FSC and FSFR had been paid prematurely to FSAM.
If you purchased FSAM common stock and would like to discuss our investigation, please contact us by e-mailing
or by calling 800-290-1952.
Attorneys: Laurence D. King, Pamela A. Mayer