February 28, 2016 Comments (0) Blog, Current Investigations

Crossroads Capital BDC Liquidation

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(Last Updated On: January 30, 2017)

Investment Losses in Keating Capital – Crossroads Capital

Have you suffered losses investing in Keating Capital or Crossroads Capital? If so, the securities attorneys at The White Law Group may be able to help.

Crossroads Capital, a business development company, announced in January it would liquidate its investment portfolio and distribute cash to shareholders, according to a press release.

This news comes after activist Bulldog Investors became the largest shareholder of the company, previously called BDCA Venture. BDCA Venture changed its name from Keating Capital in July 2014, according to SEC filed documents.

Crossroads Capital is a BDC that invests in preferred stock, common stock, subordinated convertible bridge notes, subordinated secured notes, and equity warrants.

According to the press release, the plan to liquidate was made after considerable analysis and deliberation. Both management and the board believe this is the most efficient way to deliver the company’s underlying value to the shareholders.

Shares in Crossroads Capital, which trade on Nasdaq as XRDC, closed at $2.10 January 28th.

Business Development Companies or BDCs were created by the U.S. Congress to stimulate investments in privately owned American companies that may have limited access to debt and equity capital. Non-traded BDCs offer retail investors access to private debt, an asset class that typically has only been available to high-net-worth and institutional investors. By investing in a non-traded BDC, individuals are able to pool their capital to invest in private American companies. For more information on BDCs, BDCs – the good, the bad, and the UGLY

Business Development Companies operate much in the same was as REITs (Real Estate Investment Trusts) with non-traded BDCs having many of the same problems for investors as non-traded REITs – like high-risk, high commissions, and lack of liquidity.

Brokerage firms are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor in light of that particular investor’s age, investment experience, net worth, risk tolerance, investment objectives, and income.  Firms that fail to perform adequate due diligence or that make unsuitable recommendations can be held responsible for investment losses in a FINRA arbitration claim.

If you suffered losses investing in a Crossroads Capital BDC and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 888-637-5510 for a consultation.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.  The firm represents investors in FINRA arbitration claims throughout the country.  For more information on the firm, visit http://www.whitesecuritieslaw.com.