TCA Global Credit Master Fund Lawsuit

According to multiple media reports, TCA Fund Management Group is shutting down its main hedge fund following an ongoing SEC probe into its accounting practices, and as a wave of investors seek to redeem their investments. Citing a TCA letter to investors, Bloomberg Law reports that TCA’s Global Credit Fund “received redemption and withdrawal requests in excess” of its available cash. The reports indicate that it will take TCA up to 18 months to liquidate all positions. As of December, the fund reportedly managed $516 million.

NBC News reports that according to former TCA employees, the SEC conducted an examination into TCA—and ultimately found accounting irregularities—after the company reported more than $150 million in assets. NBC reports that following the SEC investigation, TCA restated net asset values for its Global Master Credit Fund, but some TCA employees are concerned that the SEC investigation did not cover the full extent of TCA’s misconduct.

Three employees of the TCA Fund Management Group have reportedly filed a whistleblower complaint with the SEC. According to NBC News, the complaint alleges that TCA Management Group has inflated its assets and returns since 2017.

While the company boasts $500 million in assets, the complaint alleges that in reality, the fund’s holdings total roughly $300 million. This would constitute a $200 million inflation of assets. Further, while the fund claims 7% to 8% in annual earnings, the whistleblowers allege that the holdings actually generate only 1.92% annually.

NBC News reports that whistleblowers allege there are two serious problems with TCA’s accounting.  First, the company neglects to write off defaulted loans. Second, the fund has recorded investment banking fees, which it has not received, as revenue.

If the whistleblowers’ allegations are true, TCA’s revenue and asset reports may be extremely inflated.

According to NBC News, some TCA investors have been unable to redeem their investments from the Global Credit Master Fund. The news source reports that one employee even claims to have seen an internal email indicating that TCA had declined to meet in full all redemption requests received from investors.
If you invested in TCA Global Credit Master Fund and remain stuck in your investment, incurred substantial losses, or believe that the investment was unsuitable for you, you may have a claim. Speak with an experienced securities lawyers to learn more about your options.

Gibbs Law Group is currently investigating a number of bad investment products on behalf of shareholders. These products include:

• GPB Capital Funds
• Northstar Healthcare Income REIT
• Benefit Street Partners Realty Trust
• FS Credit Real Estate Income Trust–I
• The Parking REIT
• Cole Credit Property Trust III (“CCPT III”)
• Apple non-traded REIT

If you invested in any of these investments, or others, we may be able to help. Speak with a lawyer today to learn more.