InvestmentFraudLawyers.com is investigating potential violations of sales practices by financial advisers recommending UBS ETRACS Monthly Pay 2x Leveraged Long Wells Fargo Business Development Company Index ETN (Symbol: BDCL) to investors.
Recent trades in BDCL have been in the $ 3.00 / share range. Looking back on the second half of 2016 and through 2017, BDCL was generally trading between $ 16.00 / share and $ 20.00 / share. From early 2018 to 2019 (except volatility in the fourth quarter of 2018), BDCL was generally trading at $ 15.00 / share or more, and that trend continued in early 2020.
In early March 2020, it was still trading. at $ 12.00 or more. /share. Total performance for the year to date has exceeded (-80%).
BDCL seeks to replicate, net of expenses, twice the performance of the Wells Fargo Business Development Company Index. The index is a float-adjusted capitalization-weighted index that is intended to measure the performance of all Business Development Companies (“BDCs”) that are listed on the New York Stock Exchange or NASDAQ and satisfy the specified market capitalization and others. BDC’s business model is to provide loans to small and medium-sized companies at high-yield equivalent rates, and sometimes to take equity stakes in such companies.
Generally, exchange-traded notes (ETNs) are a type of unsecured debt guarantee that tracks an underlying index of securities and transactions on a significant exchange, just like a stock would. ETNs are similar to bonds but pay no interest. Instead, the price fluctuates similarly to the price of a share.
A financial institution issues eTNs to base returns on a market index. Upon maturity, the financial institution (in this case, UBS) charges fees and provides the investor with cash based on the performance of the index it is tracking. ETNs do not represent investor ownership of the securities, but simply receive a return based on what the underlying index produces.
BCDL FINRA Lawsuit and Investigation
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Haselkorn and Thibaut, P.A., is a nationwide investment fraud law firm (www.investmentfraudlawyers.com) that investigates possible violations of sales practices by financial advisers who recommended BDCL and many similar ETRAC exchange-traded notes sold to investors.
For investors, this is a particularly difficult hit, as these are the types of investments financial advisers often recommended to clients seeking income in their portfolios (often retired or equally conservative investors).
This is likely a recommendation that was expected to be low volatility and quite conservative, investors are now facing substantial losses as a result of a level of risk to their original investment principal that was probably never correctly disclosed (if ever disclosed) by its financial advisers.
As some strategies are leveraged in hopes of increasing potential returns, the level of risk has also increased, and some investors may not have been informed of those inherent risks as well.
Although financial advisers can claim that these were unforeseen market events, the reality is that these are risks similar to those experienced in the 2008-2009 financial crisis. These potential risks were r
Investors Seeking to Recover BCDL Losses
One of the best ways for investors to recover BCDL losses is through a private FINRA arbitration. It enables the customer to bring a claim and potentially recoup their investment losses of BCDL. FINRA arbitration disputes usually only involve simple paper discovery and without any depositions. Also, they are generally faster and more efficient compared to traditional court litigation. You can read more on how to sue a financial advisor or stockbroker.
About Haselkorn & Thibaut, P.A.
Haselkorn & Thibaut is a national law firm that specializes in helping investors. We have over 45 years of experience and recovered millions for clients. A majority of cases are handled on a contingency basis, meaning no recovery, no fee terms. Call today for more information at 1-800-856-3352.