July 25, 2017 Comments (0) Blog, Current Investigations

Business Development Corporation of America (BDCA) Lowers Distribution Rate

Business Development Corporation of America
(Last Updated On: August 28, 2017)

Recovery of Investment Losses in Business Development Corporation of America (BDCA)

Are you concerned about investment losses in Business Development Corporation of America (BDCA)? If so, the securities attorneys of The White Law Group may be able to help you recover your losses by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.

The White Law Group continues to investigate the liability that brokerage firms may have for improperly selling high-risk private placements like Business Development Corporation of America.

Business Development Corporation of America is a non-traded business development company that invests in both the debt and equity of private middle market companies.

BDCA primarily invests in senior secured loans, and to a lesser extent, mezzanine loans, unsecured loans and equity of private middle-market companies. The company introduced its initial public offering in January 2011 and raised $1.9 billion before closing the offering in April 2015. As of the first quarter of 2017, BDCA’s portfolio consisted of nearly $2.4 billion in investments, according to Summit Investment Research.

The company’s estimated net asset value was $8.58 per share as of September 30, 2016, or $0.39 per share lower than the valuation as of December 31, 2015.

According to recent filings with the SEC, BDCA is reducing its annual distribution rate from $0.87 per share to $0.65 per share. The board declared monthly cash dividends payable in August, September, October and November 2017, which reflect the new rate of $0.65 per share.

The Trouble with Reg D Private Placements

The trouble with Reg D private placements is that the high sales commissions and due diligence fees the brokers earn for selling such products sometimes can provide brokers with an enormous incentive to push the product to unsuspecting investors. These investors do not fully understand the risks of these types of investments, and the brokers often focus on the income potential while downplaying the risks.

Broker dealers that sell alternative investments are required to perform adequate due diligence on all investment recommendations. They must ensure that each investment recommendation that is made is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.

Fortunately, FINRA does provide for an arbitration forum for investors to resolve such disputes. If a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be found liable for investment losses in a FINRA arbitration claim.

Free Consultation

To determine whether you may be able to recover investment losses incurred as a result of your purchase of Business Development Corporation of America (BDCA), please contact The White Law Group at 1-888-637-5510 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 throughout the country in claims against their brokerage firm.

For more information on the firm and its representation of investors, visit www.WhiteSecuritiesLaw.com.