The White Law Group continues to investigate potential securities fraud claims involving broker-dealers’ improper recommendation that investors purchase high-risk non-traded business development companies such as CION Investment Corporation.
CĪON Investment Corporation (“CĪON”) is a non-traded business development company, or BDC, that primarily invests in the senior secured debt of U.S. middle market companies, which we define as companies with annual EBITDA of $50 million or less. CĪON’s investment objective is to generate current income and, to a lesser extent, capital appreciation for its investors.
According to recent filings with the SEC, on January 3, 2017, CION Investment Corporation (CION) reduced the offering price of its shares from $10.10 to $9.57 per share. The reduction coincides with CION’s reduction of the sales load for the offering of shares from 10% to 5%, outlined in a supplement to the prospectus filed on January 3, 2017. The reduction in sales load reduces the dealer manager fee from 3% to 2% and the selling commission from 7% to 3%. CION’s distribution remains unchanged and currently has an annual yield of 7.65%.
Cion Investment Corporation raised money for its investment through a Reg D private placement offering. Reg D private placements structured like Cion Investment Corporation are then typically sold by brokerage firms in exchange for a large up front commission, usually between 7-10%, as well as additional “due diligence fees” that can range from 1-3%.
The trouble with business development companies (“BDC”), like Cion Investment Corporation, is that they involve a high degree of risk and are typically sold as unregistered securities which lack the same regulatory oversight as more traditional investment products like stocks or bonds.
If you suffered losses investing in CION Investment Management 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 free 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.