Have you suffered investment losses in Cion Investment Corporation?
Did you invest in Cion Investment Corporation at the recommendation of your broker and lose money? If so, The White Law Group may be able to help you recover your losses by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.
According to their website, C?ON Investment Corporation (“C?ON”) is a non-traded business development company, or BDC, that primarily invests in the senior secured debt of U.S. middle market companies, which we define as companies with annual EBITDA of $50 million or less. C?ON Investment Corporation also states that it is a non-diversified closed-end management investment company that has elected to be treated as a Business Development Company under the Investment Company Act of 1940.
Cion Investment Corporation appears to have raised money for its investment through a Reg D private placement offering. Reg D private placements structured like Cion Investment Corporation are then typically sold by brokerage firms in exchange for a large up front commission, usually between 7-10%, as well as additional “due diligence fees” that can range from 1-3%.
On January 12, 2017, CION Investment Corporation announced a reduction in its upfront sales load from 10% to 5%. The change is effective January 4, 2017, and reduces the offering price per share from $10.10 to $9.57. Distributions on the shares remain the same and the current annual yield on the shares is 7.65%.
The Trouble with BDCs
BDCs like Cion Investment Corporation involve a high degree of risk and are typically sold as unregistered securities. They lack the same regulatory oversight as more traditional investment products like stocks or bonds.
The White Law Group continues to investigate the liability that brokerage firms may have for improperly selling BDCs like Cion Investment Corporation.
Broker dealers that sell alternative investments are required to perform adequate due diligence on all investment recommendations to ensure that each investment recommendation that is made is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.
However, another problem with Reg D private placements is that the high sales commissions and due diligence fees the brokers earn for selling such products sometimes can provide brokers with an enormous incentive to push the product to unsuspecting investors who do not fully understand the risks of these types of investments or to outright misrepresent the basic features of the products – usually focusing on the income potential while downplaying the risks.
Fortunately, FINRA does provide for an arbitration forum for investors to resolve such disputes and if a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be found liable for investment losses in a FINRA arbitration claim.
To determine whether you may be able to recover investment losses incurred as a result of your purchase of Cion Investment Corporation, please contact The White Law Group at 1-888-637-5510 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 throughout the country in claims against their brokerage firm.
For more information on The White Law Group and its representation of investors, visit www.WhiteSecuritiesLaw.com.
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