GPM Announces the Filing of a Securities Class Action on Behalf of Fifth Street Finance Corp. Investors

Glancy Prongay & Murray LLP (“GPM”) announces the filing of a class action lawsuit in the United States District Court for the Southern District of New York, on behalf of investors of Fifth Street Finance Corp. ("Fifth Street" or the "Company") (NASDAQ: FSC) who purchased shares between July 7, 2014 and February 6, 2015, inclusive (the “Class Period”). Fifth Street investors have until November 30, 2015 to file a lead plaintiff motion, and investors are encouraged to contact GPM to discuss their legal rights.

On February 9, 2015, Fifth Street revealed that it had moved $106 million worth of investments to non-accrual status with an additional $17 million likely to be designated non-accrual in the subsequent quarter, which together constituted about 5% of the Company's entire debt investment portfolio on a cost basis. This occurred around the time the Company’s executives were taking Fifth Street Asset Management ("FSAM") public. Additionally, Fifth Street revealed the net investment income received by the Company had actually decreased by 6% compared to the prior quarter even though the total assets of the Company's investment portfolio had continued to increase to nearly $3 billion by quarter end. In contradiction to its announcement of a 10% dividend increase four months before going public with FSAM, Fifth Street announced that it would not issue dividends for February 2015, and future dividend payments would decrease by more than 30%.

On this news, the price of Fifth Street common stock dropped $1.27 per share on February 9, 2015 to close at $7.22 per share, a decline of nearly 15% on volume of 10.9 million shares.

The complaint alleges that Fifth Street made increasingly risky, speculative investments at unsustainable leverage levels and delayed writing down impaired investments. The complaint also alleges that the Company artificially inflated Fifth Street’s assets and investment income in order to increase FSAM’s revenue so that defendants could cash in on FSAM’s public offering.

If you purchased Fifth Street securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Lesley Portnoy, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles, California 90067 at 310-201-9150, Toll-Free at 888-773-9224, by email to shareholders@glancylaw.com, or visit our website at http://www.glancylaw.com. If you inquire by email please include your mailing address, telephone number and number of shares purchased.

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