Fifth Street Asset Management Inc (NASDAQ: FSAM) Investor Securities Class Action Lawsuit 01/07/2016

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Company Name(s): 
Fifth Street Asset Management
Case Name: 
Fifth Street Asset Management Shareholder Class Action Lawsuit 01/07/2016
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Proposed
Affected Securities
NASDAQ: FSAM
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
01/07/2016
Class Period Begin: 
10/30/2014
Class Period End: 
01/07/2016
Court of Filing: 
U.S. District Court for the District of Connecticut
Deadline To File for Lead: 
03/07/2016
Date Settled: 
11/09/2016
Settlement Amount: 
$9,250,000
Deadline to Participate in Settlement: 
03/27/2017
Summary: 

The settlement includes all persons who or which purchased or otherwise acquired common stock of Fifth Street Asset Management Inc (NASDAQ: FSAM) pursuant or traceable to the Registration Statement for Fifth Street Asset Management Inc (NASDAQ: FSAM)’s initial public offering, which began on approximately October 30, 2014.

November 9, 2016 - The court preliminarily approved the settlement.

September 23, 2016 - Parties filed a stipulation of settlement.

June 13, 2016 - The lead plaintiff filed an amended consolidated complaint.

March 16, 2016 - The case was transferred to the U.S. District Court for the Southern District of New York.

March 7, 2016 - Lead plaintiff motions were filed.

January 7, 2016 - An investor in shares of Fifth Street Asset Management Inc (NASDAQ: FSAM) filed a lawsuit in the U.S. District Court for the District of Connecticut over alleged violations of Federal Securities Laws by Fifth Street Asset Management Inc in connection with Fifth Street Asset Management Inc’s October 30, 2014 initial public offering.

According to the complaint the plaintiff alleges on behalf of those who purchased shares pursuant to and/or traceable to the Registration Statement and Prospectus issued in connection with FSAM’s October 30, 2014 initial public offering (“IPO”), that the defendants violated the Securities Act of 1933.

Fifth Street Asset Management Inc, which is headquartered in Connecticut, is a credit-focused asset manager and the investment advisor for Fifth Street Finance Corp, Fifth Street Senior Floating Rate Corp (“FSFR”), and various private Fifth Street funds.
More specifically, the plaintiff claims that that the offering documents filed in connection with the IPO contained allegedly materially false and misleading statements of fact and allegedly failed to disclose facts necessary to make the statements made therein not misleading, including, among other statements, that Fifth Street Asset Management Inc had $4.2 billion assets under management from Fifth Street Finance Corp 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, that Fifth Street Asset Management Inc 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 Fifth Street Asset Management’s “outstanding performance,” when in fact the growth in fee revenue was largely due to the overstatement of Fifth Street Finance Corp’s assets and dilutive stock offerings detrimental to the Funds’ shareholders, and that Fifth Street Asset Management Inc had “high-quality and predictable earnings,” when in fact Fifth Street Asset Management’s revenues were unsustainable and the result of conduct that placed Fifth Street Asset Management’s most important asset – its management contract with Fifth Street Finance Corp – at risk.

Fifth Street Asset Management Inc reported that its annual Total Revenue rose from $73.62 million in 2013 to $103.21 million in 2014 while its Net Income declined from $39.77 million in 2013 to $0.53 million in 2014.

Shares of Fifth Street Asset Management Inc (NASDAQ: FSA) declined from $14.76 per share in November 2014 to as low as $3.28 per share on January 7, 2016.