CAN Capital, Inc. – SEC Files Complaint | Goodman & Nekvasil P.A. May Recover Investor Losses on Class B Subordinated Notes
According to the SEC:
This case involves violations of the of the federal securities laws by CAN Capital―a merchant cash advance (“MCA”) company and servicing company for small business loans. In 2014, CAN Capital raised $191 million from investors through the securitization of a revolving pool of CAN Capital’s outstanding MCAs and business loans.
These investors obtained the right to cash flows from the securitized MCAs and business loans. This securitization offered investors the potential for a steady income stream and it also transferred to investors the risk that accounts would not timely pay or would default. Consequently, investors relied on CAN Capital to accurately describe how it treated and disclosed non-performing MCAs and business loans and to adhere to practices that were consistent with those descriptions.
Although offering and other materials for the securitization disclosed that accounts without payment or remittance for “thirty-two consecutive days” would be declared non-performing and subsequently written-off, this did not always happen. CAN Capital at times granted forbearance from remittance requirements (referred to by CAN Capital’s collection group as grace days) to accounts that were unable to make payment and, inconsistent with disclosures, failed to designate as non-performing all accounts that made no payments for thirty-two consecutive days. CAN Capital’s use of grace days was important given credit risks associated with such non-performing accounts as well as CAN Capital’s obligation to maintain a minimum amount of performing MCAs and business loans in the securitization.
CAN Capital used grace days since before the securitization. Over time, however, its use of grace days increased significantly, and by November 2016, CAN Capital’s collateral for the securitization contained millions of dollars of non-performing assets that should have been removed from the securitization. This ultimately resulted in an event of default under the securitization due to CAN Capital’s failure to satisfy certain credit enhancement requirements designed to limit investor risk, and Class B investors in the securitization ultimately incurred sizable losses.
Investors in CAN Capital, Inc. Class B Subordinated Notes May Recover their Losses with Goodman & Nekvasil, P.A.
If you invested in CAN Capital, Inc. Class B Subordinated Notes, Goodman & Nekvasil, P.A. may help you. Goodman & Nekvasil, P.A., a Clearwater, Florida, law firm with a national practice representing victimized investors, has recovered more than $180 million dollars on behalf of victimized investors.
All our cases are handled on a purely contingency fee basis by Kalju Nekvasil, Esq., formerly regional counsel with the NASD, now known as FINRA. Kalju Nekvasil, Esq. has practiced in this area of the law for more than 35 years.
There is no charge for an evaluation of your case. Further, we handle our cases on a contingency fee basis. This means that unless we recover money for you, we charge no attorney’s fee. Unless you recover any money, you pay us nothing, not even the costs and expenses which the firm will advance on your behalf.
If you incurred investment losses in CAN Capital, Inc. Class B Subordinated Notes and would like your case evaluated by a securities attorney (again, there is no charge for an evaluation and all cases are handled on a purely contingency fee basis), please contact us.
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