Law Offices of Howard G. Smith announces that a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of all purchasers of the securities of Prospect Capital Corporation (“Prospect” or the “Company”) (NASDAQ:PSEC) between August 21, 2013 and May 6, 2014, inclusive (the “Class Period”).
Prospect is a financial services company that primarily lends to and invests in middle-market privately held companies. The Complaint alleges that, throughout the Class Period, defendants misrepresented and/or failed to disclose that:
- Certain of Prospect’s wholly owned companies were investment companies for accounting purposes that were required to be consolidated by the Company.
- Certain of Prospect’s wholly owned holding companies should have been accounted for as investment companies.
- The Company’s reported investment income and financial results were misstated.
- The Company’s internal and financial controls were inadequate.
- The Company’s financial statements were materially false and misleading at all relevant times.
On May 6, 2014, the Company disclosed that the staff of the Securities and Exchange Commission has asserted that certain of Prospect’s wholly owned companies are investment companies for accounting purposes and must be consolidated. The Company further disclosed that it may need to restate its prior financial statements to resolve the issue, and that one potential effect of a restatement would be to decrease the Company’s historical net investment income by the amount of interest and structuring income paid by such wholly owned companies in excess of the amount of income that may be reported as dividend income based on taxable earnings and profits.
If you are a member of the Class described above, you have until July 28, 2014, to move the Court to serve as lead plaintiff, if you meet certain legal requirements. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you wish to learn more about this action, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at (215) 638-4847, Toll Free at (888) 638-4847, or by email to firstname.lastname@example.org, or visit our website at http://www.howardsmithlaw.com.