BDC Scorecard Portfolio Series 18 Losses Potentially Caused by Broker Negligence

Guggenheim Defined Portfolio Trust is Too Risky for Many Retail Investors 

If you suffered losses after investing in the Guggenheim Defined Portfolio’s BDC Scorecard Portfolio Series 18 (CBDRX), our broker negligence and investment fraud attorneys at Shepherd Smith Edwards and Kantas would like to talk to you. 

Unfortunately, this investment may have been recommended and/or sold to customers even when it was unsuitable for their portfolios. If this is the case, you may be able to recover your losses by filing a FINRA arbitration claim. 

BDC Scorecard Portfolio Series 18 Plunged In Value in March 

Sponsored by the Guggenheim Funds Distributors, the Guggenheim Defined Portfolio Series 1970 is a unit investment trust (UIT) called the BDC Scorecard Portfolio Series 18. 80% percent of the value of its assets reside in business development companies (BDCs). The BDC Scorecard Portfolio 18 is very concentrated in the finance sector. In March, its shares plunged in value and have not recovered since.   

What Risks Does This UIT Present To Investors? 

BDC Scorecard Portfolio 18 is not for every investor due to the risks involved, including:

• Its high concentration in the finance sector and a lack of diversification which makes it more vulnerable to volatility or adverse changes in that sector.
• Its investment in business development companies, which tend to be close-end companies that are exempt from federal regulation. BDCs are usually very leveraged compared to other closed funds because they typically will have more debt that is outstanding.
• Issuers of a BDC have been known to suspend distributions, which can affect share prices.

In 2016, FINRA launched a probe into non-traded BDCs over concerns about their growing popularity and the way that broker-dealers and their registered representatives were marketing and selling these investments. 

They noted that BDCs are high risk and complex and a senior FINRA official spoke about how easy it was for retail investors who were buying into them to not fully understand the risks they were taking on.

Did Your Financial Advisor Misrepresent Or Omit Material Facts? 

Brokerage firms and their financial advisors have a duty to make sure that investors understand the risks involved in the BDC Scorecard Portfolio 18 and whether it is an appropriate investment for a customer’s portfolio. Unsuitable investment recommendations and sales can be grounds for a broker-dealer negligence claim.

Contact our unit investment trust fraud attorneys at SSEK Law Firm for your free case consultation about your BDC Scorecard Portfolio Series 18 investment losses today.