July 6, 2017 Comments (0) Current Investigations

Sierra Income Corporation Changes Distribution Reinvestment Program

Sierra Income Corporation
(Last Updated On: August 28, 2017)

Sierra Income Corporation Investigation

Have you suffered losses investing in Sierra Income Corporation BDC?  If so, the securities attorneys of The White Law Group may be able to help you recover your losses through FINRA arbitration.

According to Bloomberg, Sierra Income Corporation is a business development company (BDC) specializing in first lien senior secured debt, second lien secured debt and, to a lesser extent, subordinated debt of middle market companies. It invests in companies with annual revenue between $50 million and $1 billion.

Recent SEC Filings: Sierra Income Corporation DRIP and Fee Changes

The board of Sierra Income Corporation recently approved an amendment to the company’s distribution reinvestment plan where shares of common stock will be priced at 94.5 percent, rather than 90 percent, of the then current offering price. The amended DRIP will become effective on July 30th.

The company recently revised its fee structure, which went into effect on June 16th, where upfront selling commissions were reduced from 7 percent of gross proceeds to up to 3 percent, and the dealer manager fee was reduced from 2.75 percent to up to 2.50 percent.

The company’s dealer manager will reallow and pay participating broker-dealers up to 3 percent of the proceeds from their allocated sales of common stock; and 2.50 percent of the proceeds from dealer manager fees in connection with sales of common stock.

In addition, SIC Advisors LLC, Sierra’s investment adviser, will pay the dealer manager a 1 percent annual distribution and stockholder servicing fee without reimbursement by the company.

Risks of investing in BDCs

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.

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.

Recovery of Losses in Sierra Income Corporation

The White Law Group continues to investigate Sierra Income Corporation. The main focus of this fund is on senior secured debt, as well as focus on subordinated debt, with a low priority on preferred and common equity. The fund invests 15% of its total portfolio in business services, while 10% focuses on the automotive sector.

Brokerage firms are required to perform adequate due diligence on any investment they recommend. They must 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 Sierra Income Corporation 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.