NEW YORK, Aug. 10, 2016 (GLOBE NEWSWIRE) -- The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com , has opened an investigation into potential brokerage firm violations related to sale of non-traded Business Development Companies (“BDCs”) in response to the Financial Industry Regulatory Authority (FINRA) Targeted Examination Letter sent to member brokerage firms.
The scope of FINRA’s examination includes all information and documents related to non-traded BDCs, including due diligence procedures, for the period from January 1, 2015 through June 30, 2016. Earlier this year, FINRA published its annual Regulatory and Examination Priorities Letter to highlight risks that, “could adversely affect investors and market integrity in 2016”. FINRA noted the growing number of BDCs sold to retail investors, “exposed them to high commissions and fees, illiquidity risks and uncertainty regarding the time-period BDCs will hold funds before they are invested.”
According to securities attorney Lawrence L. Klayman, “Our investigation is focused on whether brokerage firms provided inaccurate and misleading information to investors in order to sell BDCs that were not suitable investments. We are also investigating whether these brokerage firms failed to supervise their brokers in conjunction with the disclosures being made to their clients.”
Mr. Klayman further explained, “Non-traded BDC investments have risks and costs which make them unsuitable for many investors.” K&T’s investigation is related to investments in non-traded BDCs, including:
- Franklin Square Energy and Power Fund;
- HMS Income Fund;
- Nextpoint Capital Fund;
- Carey Credit Income Fund;
- CNL Corporate Capital Trust; and
- Sierra Income Corporation.
According to FINRA Notice to Members 15-02 , brokerage firms are required to provide greater disclosure concerning non-traded BDCs on customer account statements. In light of these developments, K&T is conducting its investigation to determine whether brokerage firms violated FINRA sales practice rules related to non-traded BDCs, including unsuitable recommendations , misrepresentations and omissions of material facts and failure to supervise . Investors who purchased BDCs that have information relating to this investigation are encouraged to contact Lawrence Klayman, Esq. or Raymond Gentile, Esq. of Klayman & Toskes at (888) 997-9956, email info@nasd-law.com or visit our website at www.nasd-law.com .
About Klayman & Toskes, P.A. K&T is a leading national securities law firm which practices exclusively in the field of securities arbitration and litigation, on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm represents high net-worth, ultra-high-net-worth, and institutional investors, such as non-profit organizations, unions, public and multi-employer pension funds. K&T has office locations in California, Florida, New York and Puerto Rico.
Destination: http://nasd-law.com/business-development-comp...non-tra-2/
Contacts: Klayman & Toskes, P.A. Lawrence L. Klayman, Esq. Raymond Gentile, Esq. (888)-997-9956 info@nasd-law.com www.nasd-law.com
