NexPoint Capital BDC Suspends Distributions

Investor Alert: NexPoint Capital BDC

Are you concerned about your investment in NexPoint Capital? If so, the securities attorneys at The White Law Group may be able to help you by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.

NexPoint Capital, Inc. is a business development company specializing in medium-sized businesses in the healthcare sector, according to Bloomberg.

The board of NexPoint Capital Inc. has reportedly just announced the suspension of the company’s monthly distribution beginning with the month ending May 31, 2020 and includes both cash distributions and those offered through the company’s distribution reinvestment plan.

The company noted that the decision was made due to “recent volatile market conditions,” according to filings with the Securities and Exchange Commission.

The board also announced a new Net Asset Value (NAV) of $5.69 per share for the company’s common stock, this comes after the previous revision on April 29, 2020 of $5.25 per share. Shares were originally sold for $10.00 per share.

A Business Development Company (“BDC”) 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. The creation of BDCs was meant to spur investment in smaller companies that couldn’t attract traditional forms of capital.

Business Development Companies operate much in the same way as a non-traded REIT (Real Estate Investment Trust) and have the same risks for investors such as  high-risk, high commissions, and lack of liquidity.

Securities Investigation

The White Law Group has represented a number of investors over the last few years in non-traded REITs and BDCs. Unfortunately, unscrupulous financial advisors will push these products to maximize their own commissions. The firm is investigating the liability that FINRA registered brokerage firms may have for improperly recommending high-risk business development companies, like NexPoint Capital to investors.

Broker dealers are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor. Firms that fail to do so, may be held responsible for any losses in a FINRA arbitration claim.

If you have concerns regarding your investment in NexPoint Capital and would like to speak with a securities attorney about your options, please call The White Law Group at 888-637-5510.

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.

For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit http://whitesecuritieslaw.com.