HMS Income Fund BDC Securities Investigation

Have you suffered losses investing in HMS Income Fund BDC?  If so, the securities attorneys of The White Law Group may be able to help you recover those losses through a FINRA arbitration claim against the brokerage firm or financial advisor that recommended the investment to you.

HMS Income Fund  is a public, non-traded business development company (BDC) that focuses on income and capital appreciation. The company’s strategy is to make debt investments in syndicated middle-market companies as well as self-originated debt and equity investments in lower middle-market 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 HMS Income Fund 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.

If you suffered losses investing in a HMS Income Fund BDC and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 312/238-9650 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.