Shepherd Smith Edwards and Kantas Investigates Major Losses for Priority Income Fund Investors

Overview of the Situation

The securities law firm Shepherd Smith Edwards and Kantas is deeply involved in investigating urgent claims regarding significant losses sustained by investors in the Priority Income Fund. In recent communications with affected shareholders, it was revealed that this fund has shockingly lost approximately 50% of its value in a short time frame. The repercussions are particularly serious for many who were unaware of the risks associated with such investments.

Understanding the Priority Income Fund

Launched in 2013 by Behringer Harvard and Prospect Capital Management, the Priority Income Fund targets investments in collateralized loan obligations (CLOs) that are supported by high-risk corporate debt. As a private investment vehicle, it comes with inherent risks that significantly jeopardize the financial security of its investors. The two primary concerns include:

1. Total Illiquidity: Unlike public stocks, shares of the Priority Income Fund cannot simply be sold on the open market. Investors often find themselves bound by constraints, unable to access their capital when they need it.

2. Valuation Challenges: The fund provides a monthly Net Asset Value (NAV); however, this figure is just an estimate made by the fund management team. Independent verification of these valuations is not possible, which leads to uncertainty surrounding the true worth of the shares.

The Nature of the Investments

Despite being marketed as a source of income, the Priority Income Fund is laden with risks due to its speculative focus. The fund's prospectus indicates that a minimum of 80% of its assets is allocated to debt rated below investment grade, more commonly known as 'junk' investments. Adding to the difficulties, investors also face hefty fees and commissions, compounded by substantial leverage used in the funding strategies, which elevates the risk of complete financial loss.

Misconduct by Brokers

The Priority Income Fund was primarily intended for sophisticated investors who are prepared to accept high levels of risk. However, many individuals, particularly retirees and retail investors, report they were not adequately informed about the inherent risks. Instances of broker misbehavior, where inappropriate recommendations were made, create potential grounds for claims against brokers and advisory firms involved in the sale of the Priority Income Fund.

Taking Action

Shepherd Smith Edwards and Kantas have recently initiated a significant financial claim through FINRA arbitration against United Planners' Financial Services of America regarding the unsuitable sale of the Priority Income Fund to an elderly couple. Legal action may be the most effective path for individuals seeking financial recovery. With a wealth of experience securing restitution for clients, the firm emphasizes the importance of accountability from financial advisors responsible for guiding investors into such risky products.

Reaching Out for Help

Investors who believe they have been misled or inadequately advised regarding the Priority Income Fund are encouraged to reach out for a free consultation. With well over a century of collective experience, Shepherd Smith Edwards and Kantas remain dedicated to assisting clients in recovering their financial losses. For support, individuals can contact the firm at (800) 259-9010 or visit their website for additional information.

Conclusion

The investigation into the Priority Income Fund has emerged as a critical issue for many investors. Those affected are urged to seek professional guidance to explore their options for financial recovery. With a landscape filled with investment risks, having informed legal representation can make a significant difference in securing justice for lost investments.