Recovery of Investment Losses in First Capital Investment Corporation
Have you suffered losses investing in First Capital Investment Corporation? If so The White Law Group may be able to help you recover your losses by filing a FINRA arbitration claim against the brokerage firm that sold you the investment.
First Capital Investment Corporation is a publicly registered, non-traded business development company. The Company is focused on generating current income and long-term capital appreciation by investing in primarily private U.S. small and middle-market companies. FCIC provides customized financing solutions through directly originated loans, through equity investments, and by participating in syndicated transactions.
According to recent SEC Filings, on May 16, 2017, First Capital Investment Corporation (FCIC) announced that it would not be able to file its Form 10-Q for the quarter ended March 31, 2017 in a timely manner. FCIC noted that it was unable to complete the timely filing of Form 10-Q due to the March 28, 2017 transaction in which First Capital Real Estate Investments, LLC acquired the membership units of Freedom Capital Investment Management LLC (FCIM), and Democracy Funding LLC. FCIM is the parent company of FCIC Advisors LLC, the investment advisor to FCIC.
What is a Business Development Company (BDC)?
A Business Development Company (“BDC”) invests in small and mid-sized businesses. Investors can buy shares in a BDC, and the money from their investments is used to fund the businesses. In turn, investors can profit from dividends paid on their investments, or, in some cases, the sale of their shares.
BDCs were created in 1980 after Congress approved a series of amendments to the Investment Act of 1940. The creation of BDCs was meant to spur investment in smaller companies that couldn’t attract traditional forms of capital. BDCs have become increasingly popular in recent years, in part due to their ability to create strong returns on investment. However, BDCs are not without their risks and pitfalls.
Risks of BDCs
Business Development Companies such as First Capital Investment Corporation operate much like REITs (Real Estate Investment Trusts). Non-traded BDCs have many of the same problems for investors as non-traded REITs. They are high-risk, often have high commissions, and lack liquidity.
The White Law Group has represented a number of investors over the last few years in non-traded REITs and as well as BDCs– in large part because of their high commission structure and the possibility that nefarious financial advisors will push these products unsuitably to maximize their own commissions. As such, the firm is investigating the liability that brokerage firms may have for recommending high-risk BDCs, like First Capital Investment Corporation BDC.
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 First Capital Investment Corp 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, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee. The firm represents investors in FINRA arbitration claims throughout the country. For more information on the firm, visit https://www.whitesecuritieslaw.com.