Glancy Binkow & Goldberg LLP, representing investors of Prospect Capital Corporation (“Prospect” or the “Company”) (NASDAQ:PSEC), has filed a class action lawsuit in the United States District Court for the Southern District of New York on behalf of a class (the “Class”) comprising all purchasers of Prospect securities between August 21, 2013 and May 6, 2014, inclusive (the “Class Period”).

Please contact Glancy Binkow & Goldberg LLP, toll-free at (888) 773-9224 or at (212) 682-5340, or by email to shareholders@glancylaw.com to discuss this matter.

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.

Following this news, the price of Prospect shares declined $0.54 per share, to a closing price of $10.20 per share on May 7, 2014, on unusually heavy volume.

If you are a member of the Class described above, you may move the Court no later than 60 days from the date of this Notice 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, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Michael Goldberg, Esquire, of Glancy Binkow & Goldberg LLP, 1925 Century Park East, Suite 2100, Los Angeles, California 90067, Toll Free at (888) 773-9224, or contact Gregory Linkh, Esquire, of Glancy Binkow & Goldberg LLP at 122 E. 42nd Street, Suite 2920, New York, New York 10168, at (212) 682-5340, by e-mail 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.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.