Franklin BSP Lending Corporation Shareholder Lawsuits 

Did your broker-dealer recommend an investment in Franklin BSP Lending Corporation formerly known as Business Development Corporation of America (BDCA)?  If you have suffered losses at the recommendations of your financial advisor, the securities attorneys at the White Law Group may be able to help you. 

According to a press announcement on January 4, 2022, the Board of Directors of Business Development Corporation of America (BDCA) has elected to change the name of the company to Franklin BSP Lending Corporation (FBLC) as of January 1, 2022. 

Franklin BSP Lending Corp is a non-listed business development company that primarily underwrites loans to middle market corporate borrowers across a variety of industries. The company is externally managed by Benefit Street Partners (“BSP”). 

Securities Investigation involving Franklin BSP Lending Corp (fka BDCA) 

The White Law Group continues to investigate potential claims involving broker dealers who may have unsuitably recommended high risk Business Development companies (BDCs) such as Franklin BSP Lending Corporation to unsuspecting investors. The firm has received numerous calls from investors looking to recover financial losses from investments in BDCs. 

On August 9, 2021, Mackenzie Realty Trust extended an unsolicited tender offer to purchase shares of BDCA for just $2.50 per share, yet the original purchase price was $10.00 per share.  

Apparently, the company’s repurchase program is oversubscribed, as 40 million shares were reportedly submitted to the company for resale, yet the company only repurchased about 7% of the shares, according SEC filings.  

High Risk Alternative Investments 

The first major component in the non-traded BDC’s risk profile is its lack of liquidity. Without an open market to trade on, owners of non-traded BDCs can be stuck holding their investments for years, sometimes without ever getting the opportunity to sell. 

Additionally, the actual value of a BDC is not always clear or available. The SEC requires non-traded BDCs to be valued just once a quarter. Furthermore, this valuation is not a market-value, and thus not a reflection of what the BDC shares could be sold or redeemed for. Rather, the quarterly calculation is a “good-faith” valuation conducted by the BDCs board of directors and is based on the assets and overall financial well-being of the underlying companies. 

The high commission structure of BDCs is similar to that of a non-traded REIT, leading to the possibility that unscrupulous financial advisors will push these products unsuitably to maximize their own commissions.  

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. 

Potential to Recover Financial Losses 

If you suffered losses investing in a Franklin BSP Lending Corporation (fka BDCA) with your financial advisor, 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 Seattle, Washington.  The firm represents investors in FINRA arbitration claims throughout the country.  For more information on the firm, visit http://whitesecuritieslaw.com.