Corporate Capital Trust Amends Distribution Plan

Have you suffered losses investing in Corporate Capital Trust BDC?  If so, the securities attorneys of The White Law Group may be able to help you recover your losses through a FINRA arbitration claim.

On October 7, 2016, the board of directors of Corporate Capital Trust (CCT) approved an amendment and restatement of CCT’s distribution reinvestment plan (DRP). Following the amendment, while CCT is not offering shares in a public offering, cash distributions, to participating shareholders, will be reinvested in additional shares at a price determined by the board of directors that will not exceed 2.5% of the net asset value per share as of the date of reinvestment, compared to the previous reinvestment price of 90% of the then current public offering price.

Corporate Capital Trust BDC is a non-traded business development company (BDC) that provides individuals an opportunity to invest in the debt of privately owned American companies.

A Business Development Company (“BDC”) is a form of investment company that invests in small and mid-sized businesses. Investors can buy shares in a BDC, and the money from their investments is used to fund the businesses. In turn, investors can profit from dividends paid on their investments, or, in some cases, the sale of their shares.

BDCs are a relatively new investment product, they were created in 1980 after Congress approved a series of amendments to the Investment Act of 1940. The creation of BDCs was meant to spur investment in smaller companies that couldn’t attract traditional forms of capital. BDCs have become increasingly popular in recent years, in part due to their ability to create strong returns on investment. However, BDCs are not without their risks and pitfalls.

Business Development Companies operate much in the same was as REITs (Real Estate Investment Trusts) with non-traded BDCs having many of the same problems for investors as non-traded REITs – like high-risk, high commissions, and lack of liquidity.

The White Law Group has represented a number of investors over the last few years in non-traded REITs and has concerns that BDCs may be the next new wave of problem investments for investors – in large part because of their high commission structure and the possibility that nefarious financial advisors will push these products unsuitably to maximize their own commissions.

As such, the firm is investigating the liability that brokerage firms may have for recommending high-risk BDCs, like Corporate Capital Trust BDC.

Brokerage firms are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor in light of that particular investor’s age, investment experience, net worth, risk tolerance, investment objectives, and income.  Firms that fail to perform adequate due diligence or that make unsuitable recommendations can be held responsible for investment losses in a FINRA arbitration claim.

For more information on The White Law Group’s investigation of Corporate Capital Trust see Corporate Capital Trust Tender Offer.

If you suffered losses investing in a Corporate Capital Trust BDC and would like to discuss your litigation options, please call the securities attorneys of 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 and Franklin, Tennessee.  The firm represents investors in FINRA arbitration claims throughout the country.  For more information on the firm, visit https://whitesecuritieslaw.com.