More Worrying News For Business Development Company Investors As Moody’s Issues A Negative Outlook on BDCs

Following Moody’s downgrade of the business development company outlook to negative, Shepherd Smith Edwards and Kantas is helping investors pursue claims against brokers for unsuitable BDC recommendations. Their legal team investigates instances of overconcentration and failure to disclose risks, seeking to recover losses through arbitration for affected retail and accredited investors.

For investors of risky, high-yield non-traded business development companies( non-traded BDCs), credit ratings agency Moody’s decision to downgrade its outlook on BDCs from stable to negative is creating even more concerns over their involvement in the private credit market. Many investors were sold their non-traded BDCs by financial advisors, who have come under scrutiny over whether they conducted the proper due diligence before involving customers.

Non-traded BDCs comprise over 60% of business development companies. Moody’s justified its downgrade by pointing to:

• Less access to funding markets.
• Greater leverage.
• Increasing calls for investor redemptions.

These were a few of the same reasons why non-traded BDC investors were worried before the ratings downgrade.

Shepherd Smith Edwards and Kantas (investorlawyer.com) represents non-traded BDC investors and other private credit market investors in pursuing damages from financial advisors for making unsuitable investment recommendations and committing other broker misconduct or negligence.

 What are Non-traded Business Development Companies?

• This type of BDC is a closed-end investment fund that invests in private companies in the United States that aren’t big enough to borrow money from traditional banks.
• Non-traded BDCs aren’t found on any public stock exchanges.
• They offer limited liquidity and are considered long-term investments.
• Investors looking for greater yields are drawn to this kind of alternative investment.
• Non-traded business development companies are unsuitable for many retail investors.

 What Are Some of The Risks Involved in Non-traded BDCs?

• Limited liquidity
• High fees and commissions
• Leverage is involved, which can increase yields, but also the risk of loss
• Credit and default risks

I’m A Retail Investor. Can I Invest In Non-Traded BDCs?

In order to get involved in non-traded business development companies, retail investors must meet certain gross income or net worth requirements, depending on the US state they reside. Unfortunately, that doesn’t always stop financial advisors from unsuitably recommending non-traded BDCs to customers.

Why Non-Traded BDCs Investors Should Explore Their Legal Options

Whether you are a retail investor or an accredited investor, you may be impacted if your non-traded BDC or other investment in the private credit market is suddenly experiencing serious losses. You will want to speak with one of our savvy business development company attorneys if you suspect that your financial advisor:

• Made an unsuitable investment recommendation.
• Overconcentrated your account with too many non-traded BDCs.
• Failed to properly apprise you of the risks.
• Neglected to disclose conflicts of interest.
• Ignored your best interests.
• Engaged in some type of negligence.
• Mishandled your investments.
• Engaged in some other type of broker misconduct or negligence.

We are Seasoned Non-Traded BDC Investor Lawyers

• Shepherd Smith Edwards and Kantas represents non-traded business development company investors against brokers and investment advisers.
• We are experienced securities attorneys with decades of experience fighting for investors in arbitration, mediation, and litigation.
• When you work with us, you are hiring everyone at our securities law firm to represent you.
• Our BDC recovery attorneys are genuinely committed to protecting your legal rights while giving you the best chance at financial recovery. 

Do You Have A Non-Traded BDC Case? Find Out Now.

Because we work on a contingency basis, if we agree to work together, you will only pay us for our legal services if we secure your financial recovery.

Call our Non-Traded BDC Investor Lawyers today at  (800) 259-9010 or fill out this online form today.