The lawsuit, which Silver Law Group filed in federal court along with co-counsel Weinberg Wheeler Hudgens Gunn & Dial and Gibbs law Group, is filed on behalf of investors in TCA’s funds (Plaintiffs), seeks to recover investor losses and alleges that Defendants knowingly inflated the value of TCA’s Master fund in part by “failing to remove or properly value bad loans and creating phantom “investment advisory” fees that were fraudulent and uncollectable.”
If you or someone you know invested with TCA, please contact Scott Silver of the Silver Law Group toll free at (800) 975-4345 or e-mail ssilver@silverlaw.com for a no-cost confidential consultation about your legal options.
It is alleged that as a result of the inflated value, “Defendants were paid excessive management fees for advising the fund, and redeemed investments in the TCA funds at excessive values, before the fund collapsed.”
The amended class action complaint can be viewed here.
TCA Global Credit Master Fund Shuts Down
In January, 2020, TCA Fund Management Group announced that it was liquidating its main investment fund, the Global Credit Master Fund, after clients asked to withdraw more cash than it had available.
News of the fund’s collapse came on the heels of an SEC whistleblower complaint filed by two TCA employees, which alleged that the Global Credit Master Fund had inflated its earnings and assets since 2017. The SEC (Securities and Exchange Commission) is investigating the company’s accounting practices.
The whistleblowers say they filed their complaint out of concern that the SEC did not understand how serious problems at TCA were after the SEC found irregularities and TCA restated its earnings.
TCA’s Direct Lending & Alleged Fraud
TCA’s Global Credit Master Fund was in the business of giving high-interest loans to distressed companies who may not have been able to get loans from banks. The lending was high-risk, but also potentially high reward. TCA had claimed to earn a return of 7% or 8% and to have $500 million in holdings.
The whistleblower complaint filed by TCA employees claims that the company wasn’t recording losses on bad loans, and also recorded fees for revenues that it would never earn. They claim that an accurate accounting of the fund’s holdings would amount to roughly $300 million and a less than 2% return.
An NBC News article about the TCA implosion details an example of the activity alleged in the SEC whistleblower complaint. In 2018, a business owner in Alaska took a $3 million loan from TCA. She signed a document stating she might pay $1.45 million to TCA for investment banking services. Her business never paid that money to TCA. Yet TCA allegedly recorded $1.45 million in fees earned from her business.
TCA Class Action
Irrespective of whether investors found TCA through a broker or on their own, they may be eligible to participate in the class action lawsuit. Silver Law Group’s class action lawsuit alleges that “Investors would not have invested if TCA’s owner, directors, and others disclosed their real backgrounds in its form ADV or the offering memorandum.”
Among the information investors are alleged to have not known are that Robert Press was involved with several companies that collapsed with allegations that Press was running a “boiler room” or other fraud.
The class action also alleges that TCA did not disclose its litigation history and “true business model of driving its investment targets into a financial death spiral and having the Master Fund sue its own borrowers to foreclose on their assets, creating a strong possibility of default on investments,” according to the complaint.
“Our clients were shocked to learn about TCA Management’s troubled history and involvement in multiple lawsuits,” said Scott Silver, Silver Law Group’s managing partner.
Contact Silver Law Group To Discuss Options To Recover TCA Losses
Our firm represents plaintiffs in claims against hedge funds, investment advisors, brokers, banks, and others for potential violations of the federal or state securities laws.
Silver Law Group’s nationally-recognized class action and securities arbitration attorneys represent investors throughout the U.S. and around the world. If you or someone you know invested in the TCA Global Credit Fund, please contact the Silver Law Group toll free at (800) 975-4345 or e-mail ssilver@silverlaw.com for a confidential no-cost consultation.