NASDAQ GS
FSC

Fifth Street Finance Corp.

Shareholder Securities Fraud Litigation

Rigrodsky & Long, P.A. Announces A Securities Fraud Class Action Lawsuit Has Been Filed Against Fifth Street Finance Corp. (NASDAQ GS: FSC)

Rigrodsky & Long, P.A. announces that a complaint has been filed in the United States District Court for the Southern District of New York on behalf of all persons or entities that purchased the common stock of Fifth Street Finance Corp. (“Fifth Street” or the “Company”) (NASDAQ GS: FSC) between July 7, 2014 and February 6, 2015, inclusive (the “Class Period”), alleging violations of the Securities Exchange Act of 1934 against the Company and certain of its officers (the “Complaint”).

If you purchased shares of Fifth Street during the Class Period, or purchased shares prior to the Class Period and still hold Fifth Street, and wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Timothy J. MacFall, Esquire or Peter Allocco of Rigrodsky & Long, P.A., 2 Righter Parkway, Suite 120, Wilmington, DE 19803 at (888) 969-4242; by e-mail to info@rl-legal.com.

The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements, and omitted materially adverse facts, about the Company’s business, operations and prospects.  As a result of defendants’ alleged false and misleading statements, the Company’s stock traded at artificially inflated prices during the Class Period.

According to the Complaint, on February 9, 2015, Fifth Street reported its fiscal results for the quarter ended December 31, 2014 – the same quarter in which Defendants conducted the Fifth Street Asset Management (“FSAM”) IPO.  Fifth Street revealed that, around the time its executives were taking FSAM public, it had moved $106 million worth of investments to non-accrual status with an additional $17 million likely to be designated non-accrual in the subsequent quarter, which together constituted about 5% of the Company’s entire debt investment portfolio on a cost basis.  The Company also revealed that, even though the total assets of Fifth Street’s investment portfolio had continued to increase to nearly $3 billion by quarter end, the net investment income received by the Company had actually decreased by 6% compared to the prior quarter.  And, despite having announced a 10% dividend increase only four months before taking FSAM public, Fifth Street declared that it would issue zero dividends for February 2015, while decreasing future dividend payments by more than 30% as part of a more “conservative” dividend policy.

On this news, shares in Fifth Street dropped almost 15%, closing at $7.22 per share on February 9, 2015, on heavy trading volume.

If you wish to serve as lead plaintiff, you must move the Court no later than November 30, 2015.  A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation.  Any member of the proposed class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

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