NEW YORK, May 29, 2014 (GLOBE NEWSWIRE) -- Pomerantz LLP has filed a class action lawsuit against Prospect Capital Corporation ("Prospect Capital" or the "Company") (Nasdaq:PSEC) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and docketed under 14-cv-3847 is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired Prospect Capital securities between August 23, 2013 and May 6, 2014, both dates inclusive (the "Class Period"). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
If you are a shareholder who purchased Prospect Capital securities during the Class Period, you have until July 28, 2014 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll free, x237. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
Prospect Capital is a financial services company that primarily lends to and invests in middle market privately-held companies. The Company is a closed-end investment company that has filed an election to be treated as a business development company under the Investment Company Act of 1940 ("the 1940 Act"). The Company invests primarily in senior and subordinated debt and equity of companies in need of capital for acquisitions, divestitures, growth, development and recapitalization.
The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) certain of Prospect Capital's wholly owned companies were investment companies for accounting purposes that were required to be consolidated by the Company; (2) as such, certain of Prospect Capital's wholly owned holding companies should have been accounted for as investment companies; (3) as a result, the Company's reported investment income and financial results were misstated; (4) as such, the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); (5) that the Company lacked adequate internal and financial controls; and (6) that, as a result of the foregoing, the Company's financial statements were materially false and misleading at all relevant times.
On May 6, 2014, after the market close, the Company filed its Form 10-Q with the SEC and announced that the SEC's staff had asserted that some of the Company's wholly owned companies are investment companies for accounting purposes and must be consolidated. The Company announced that the Company may have to restate its prior financial statements to resolve the issue. 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 can be reported as dividend income based on taxable earnings and profits.
On this news, shares of Prospect Capital declined $0.54 per share, over 5%, to close on May 7, 2014, at $10.20 per share, on unusually heavy volume.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and San Diego, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
CONTACT: Robert S. Willoughby Pomerantz LLP email@example.comSource:Pomerantz LLP