Mutual Fund Investment Loss Attorneys

Our Closed-End Mutual Fund Investment Loss Attorneys Work With Retail Investors, Retirees and Others 

Priority Income Fund Investors Are Wondering What To Do After Liquidity Strategy Changes

While many investors generally think of mutual funds as safe, low-risk investments, that is not always the case. Now, in the wake of Priority Income Fund disclosing to the US Securities and Exchange Commission (SEC) that there has been a change to its liquidation strategy, investors of this closed-end mutual fund may be grappling with what they should do to protect their money.

Shepherd Smith Edwards and Kantas (investorlawyers.com) are looking into whether brokers may have unsuitably recommended Priority Income Fund to clients and/or failed to conduct proper due diligence into this investment.

What Is Priority Income Fund?

This is an illiquid, closed-end mutual fund. Priority Income Fund’s prospectus notes that at least 80% of its investments are in securitized pools of senior secured loans, as well as those in the primary and secondary markets. Priority Income Fund invests in equity and junior tranches of collateralized loan obligations and securities issued by foreign entities, which bring added risks.

In Priority Income’s SEC filing, this speculative, illiquid, high-risk fund is now stating that, rather than definitely moving forward with plans to pursue a liquidity event at the completion of its offering, the Fund, which may still go through with this, no longer considers themselves “obligated” to do so for stockholders. Priority Income’s offering will end after 150 million shares of common stock are sold unless the board of directors opts to do so sooner. (The Fund’s prospectus had marked December 31, 2022, or the sale of 150 million shares, as the offering’s completion. As of September 16, 2022, more than 47 million shares that were issued were still outstanding.)

Priority Income Fund’s shares are not found on any securities exchanges at this time. Because of this, investors are unable to sell their shares right away—except through its share repurchase program or, in certain instances, via transfers to “other eligible investors,” per the prospectus. They can only do so if and after the Fund liquidates (or some other liquidity event occurs), which could leave shareholders in a stuck place and with significant investor losses.

Why You Might Have Grounds for a Closed-End Mutual Fund Claim For Damages

Priority Income Fund has stated that investing in its shares involves “a high degree of risk and may be considered speculative.” It even provides three pages of said risks, including exposure to underlying borrower fraud via its portfolio securities, investments being subject to prepayments and calls, exposure to leveraged credit risks, and much more.

Broker-dealers have a duty to properly disclose all risks when recommending and/or selling an investment to you. They also must ensure that any investment, trade, or strategy they market to you is appropriate given your age, risk tolerance level, investing goals, financial needs, and the makeup of the rest of your portfolio. Otherwise, you may have been subject to an unsuitable investment recommendation.

How Can Our Mutual Fund Investment Loss Attorneys Help? 

Our skilled closed-end mutual fund investment loss lawyers represent clients whose brokers unsuitably recommended Priority Income Fund (or any other financial products), made misrepresentations and omissions about the risks, overconcentrated their account with this investment, or engaged in other alleged broker misconduct or negligence.

We help investors sue their broker-dealers for damages while protecting their legal rights.

Call (800) 259-9010 today.