Did your Broker recommend a VII Peaks Investment?
The White Law Group continues to investigate potential securities claims involving broker dealers who may have improperly recommended VII Peaks Capital LLC offerings to investors.
VII Peaks Capital LLC is an investment management firm based in Orinda, California, according to Crunchbase. Their firm invests primarily in discounted corporate fixed income securities and employs a “co-optivist”TM (co-operative activism) approach where they act as cooperative, activist investors who work with senior management teams of target companies to proactively restructure their outstanding corporate debt.
Their goal reportedly was to work with management teams and other stakeholders to help make the corporate debt they invest in a performing security while helping the target company de-leverage their balance sheet.
The company filed several private placement offerings to raise capital from investors including the VII Peaks Co-optivist Income BDC II.
The trouble with non-traded BDCs, like VII Peaks Co-optivist Income BDC II is that they are complex and inherently risky products.
According to filings with the SEC, the fund has seen a continual decline in value since its inception in 2014. The original offering price was $10.15 per share, but the fund decreased this price, as the NAV declined. In 2016 the BDC’s shares were sold for $8.75 per share and by December 2017 the net asset value had decreased to just $5.31 per share due to high yield debt prices declining, according to the filings. One of the fund’s positions, Relativity Media, apparently filed for bankruptcy in 2018, according to public records.
On November 15, 2018, the VII Peaks Co-optivist Income BDC II filed a notification of late filing of its financial reports, and has yet to file them, as of this writing.
Lack of liquidity in BDCs is often problematic for many investors. Investors looking to sell often have difficulty finding a buyer, and can suffer significant losses on the sale.
According to Central Trade and Transfer, a secondary market for non-traded REITs and BDCs, shares of VII Peaks Co-Optivist Income BDC II, Inc. sold in October 2020 for just $0.36 per share.
Broker dealers are required to inform clients of the risks associated with investment recommendations and to ensure that those recommendations are suitable for the investor in light of the investor’s age, risk tolerance, net worth, and investment experience. Firms that fail to do so, may be held responsible for any losses.
Filing a Complaint against your Brokerage Firm
To determine whether you may be able to recover investment losses incurred as a result of your purchase of a VII Peaks Capital offering, please contact 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. For more information on the firm, visit www.WhiteSecuritiesLaw.com.