Alleged Unsuitability and Due Diligence Failures May Be Grounds for a FINRA Lawsuit
If you are someone whose financial advisor recommended one of the TCA Global Credit Funds to you, there may be reasons to sue your broker-dealer for damages. In 2020, TCA Fund Management Group Corp. and key executives were accused of securities fraud, including allegedly fraudulently inflating the net asset values and performance outcomes of a number of its funds. This purportedly led to hundreds of investors being defrauded while leaving its funds, which allegedly falsely held about $516M, in serious trouble. Affiliated company TCA Global Credit Fund GP Ltd. also was accused of investor fraud.
Shepherd Smith Edwards and Kantas (investorlawyers.com) are working with a number of TCA Global Fund investors to determine whether they have grounds for a FINRA lawsuit. Unfortunately, it appears that alleged due diligence failures, unsuitability, misrepresentations and omissions, and broker negligence may have been factors when certain brokers marketed and sold one of these TCA Funds to customers:
- TCA Global Credit Fund, LP
- TCA Global Credit Fund, Ltd.
- TCA Global Credit Master Fund, LP
The TCA Global Credit Master Fund was the main credit hedge fund while the other funds were feeder funds. The Master Credit Fund was shuttered in early 2020 after the SEC began a probe into possible accounting issues. Investors were told that the Fund was getting redemption and withdrawal requests that were “in excess” of cash that was available. The Commission filed a securities fraud lawsuit.
Also, three TCA Fund employees turned whistleblower and accused TCA Fund Management Group of having $300M in assets that made just 1.92% in interest yearly—as opposed to holding over $500M that was making 7% to 8% in interest, which is what investors were purportedly told. The former employers said that the company, which is a Florida investment firm and lent funds to distressed small- and mid-sized companies, allegedly failed to book losses on defaulted loans and recorded revenue fees that it had yet to receive or would never receive. Revenues were allegedly inflated for nearly a decade while investors were purportedly sent fake account statements misrepresenting the returns.
Inflating returns can be profitable for fund managers, who are often paid a percentage of the assets they are in charge of overseeing. Meanwhile, an inflated portfolio may cause investors to get involved in something that they wouldn’t otherwise. The minimum investment in the TCA Fund was $100K.
Is Your Broker Responsible For Your TCA Fund Investor Losses?
While your financial advisor and broker-dealer may not have been directly involved in the allegedly fraudulent activities involving any of the TCA Global Credit Funds, they still owed you a fiduciary duty to ensure that these were legitimate and safe investments. They also were required to make sure that any investment they marketed and sold you were suitable given your investing experience, age, risk tolerance level, financial goals, and other criteria. When failure to do either leads investors to back products that proved unsuitable for them or fraudulent even, these customers may be able to hold their brokerage firms liable through Financial Industry Regulatory Authority (FINRA) arbitration or a FINRA Lawsuit.
For example, many investors, including retail customers, inexperienced investors, and other conservative investors are unsophisticated investors that depend on their broker to give them sound financial advice and will often follow the recommendations given. Proper due diligence would have allowed brokerage firms to discover that there were red flags involving the TCA funds and such detection could (and should) have prevented them from unsuitably recommending these investments to certain customers.
How Can Working Skilled FINRA Lawyers Help TCA Fund Investors?
If broker negligence was a factor in you becoming a TCA Fund investor and you suffered significant losses, you may be able to hold your broker-dealer liable. FINRA arbitration is the dispute resolution venue where investors can go to resolve disagreements with their brokerage firms and financial advisors. This is not a process that you want to go through without experienced FINRA arbitration attorneys by your side.
Once the FINRA arbitration panel presiding over your securities fraud case makes a ruling, it is final and cannot be appealed. This is why you want to build a convicting case of brokerage firm negligence or fraud from the start.
Proving that broker misconduct was a factor can be difficult, as is finding the evidence to back this type of investor loss claim. Shepherd Smith Edwards and Kantas have been fighting for investors for over 30 years. We have recovered many millions of dollars in arbitration, mediation, and litigation for our clients who have been the victims of stockbroker fraud or negligence.
Should we agree to work together, you should know we work on a contingency basis. This means we will only ever be owed legal fees if we recover damages from you. This will always come out of the award or settlement reached and never out of your own pocket. More than 90% of investors who have retained us have recovered all or part of their investor losses.
How Can you Schedule Your Initial, No Obligation Case Assessment With Our Knowledgeable TCA Fund Investor Loss Attorneys?
Call Shepherd Smith Edwards and Kantas at (800) 259-9010 for your no-obligation FINRA Lawsuit consult today.