Shepherd Smith Edwards & Kantas LLP Investigating Claims Of Investors In Securities-Backed Lines Of Credit

Feb 17, 2016, 17:32 ET from Shepherd Smith Edwards & Kantas LLP

DENVER, Feb. 17, 2016 /PRNewswire/ -- Lawyers with the Securities Law Firm of SHEPHERD SMITH EDWARDS & KANTAS LLP,, are investigating claims of investors that purchased or used Securities-Backed Lines of Credit ("SBLOCs") and suffered losses as a result.  The Financial Industry Regulatory Authority ("FINRA") has recently issued an "Investor Alert" regarding the use of SBLOCs.  Specifically, FINRA warns that the use of SBLOCs has been increasing, including an increase of their use of roughly 70% between 2012 and 2014.  However, investors that have used or are using them may not be aware of the amount of risk involved.

An SBLOC is a loan that some brokerage firms market to investors as a simple and cheap way to get immediate cash without liquidating investments.  Effectively, investors borrow money from their brokerage firm or some other third party, but put up their investments as collateral, much as a home owner can borrow money against the value of their home with a home-equity loan. 

However, these loans come with risks.  The lender requires the borrower to maintain a certain ratio of investment value to outstanding loan balance.  "If the value of the securities you pledge as collateral decreases, you may need to come up with extra money fast, or your positions could be liquidated."  FINRA has raised concerns that marketing materials being used in connection with these loans may not fairly disclose these risks.  

If you are in an investor who lost money as a result of using a Securities-Backed Line of Credit that was recommended to you by your broker or financial advisor, contact the law firm of Shepherd, Smith, Edwards & Kantas LLP for an evaluation of the account to determine if there might be a claim to attempt to recover some or all of the losses.  All communications will be kept strictly confidential, and you will not be billed in any way for the consultation. 

Shepherd Smith Edwards & Kantas LLP has a team of attorneys, consultants and staff with more than 100 years of combined experience in the securities industry and in securities law. For more than two decades, our firm has represented thousands of investors nationwide to recover losses. We have represented clients in Federal and state courts and in arbitration through the Financial Industry Regulatory Authority (FINRA), the New York Stock Exchange Inc. (NYSE), the American Arbitration Association (AAA) and in private arbitration actions.

Contact Info: 866-377-2529

Kirk Smith


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