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Articles Tagged with Business Development Companies

Risky, Illiquid Business Development Company Was Not Suitable for Many Investors

If you are someone who invested in the Sierra Income Corporation, you may have lost money. This business development company (BDC) is a non-traded investment. 

Earlier this year, Sierra Income suffered losses after its announced merger with Medley Capital Corp. and Medley Management Inc. was terminated because of the economic uncertainty caused by COVID-19. Not long after that, the company announced that it was suspending monthly redistributions.

The Financial Industry Regulatory Authority is ordering Purshe Kaplan Sterling Investments (PKS) to pay almost $3.4M in restitution to a Native American tribe. The tribe had paid excessive sales fees for the purchase of Business Development Companies (BDCs) and non-traded Real Estate Investment Trusts (REITs).

Gopi Vungarala was the Purshe Kaplan Sterling registered representative for the tribe from 7/2011 through at least 1/15/15. He was also the tribe’s Treasury Investment Manager at the same time. It was his job was to oversee the group’s investment portfolio.

FINRA’s case against Vungarala in this matter has yet to be resolved. However, Purshe Kaplan Sterling must also pay $750K for its purportedly inadequate supervision of nontraded REIT and BDC sales.

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