Fraud Case Shapes Up Against Triangle Capital Corporation
WASHINGTON, DC (December 7, 2017) — U.S. Market Advisors Law Group PLLC announces that a securities class action has been filed Triangle Capital Corporation (NYSE:TCAP). The class action is on behalf of investors who acquired Triangle Capital securities between May 7, 2014 and November 1, 2017.
Investors with losses have until January 22, 2018 to ask the Court to appoint you as Lead Plaintiff for the class. The Lead Plaintiff is a representative for absent members of the class. Investors do not need to seek appointment as Lead Plaintiff to share in any class recovery in this action. If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action. Contact USMA Law Group to discuss this action.
Triangle Capital Corporation operates as a private equity firm. The Company invests in manufacturing, distribution, transportation, energy, communications, health services, restaurants, and other business sectors.
Allegations Against Triangle Capital
The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (i) as early as 2013, Triangle’s investment professionals had internally recommended moving away from mezzanine loan deals due to changes in the market that no longer made these investments attractive risk-reward opportunities; (ii) the Company’s former CEO, Defendant Tucker, had ignored the advice of Triangle’s investment professionals to chase higher short-term yields by causing Triangle to invest in mezzanine debt despite the poor quality of the loans and their increased risk of defaults and nonaccruals; (iii) the Company’s entire vintage of 2014 and 2015 investments were at substantial risk of non-accrual as a result of the poor quality of the investments and deficient underwriting practices in place at the time of the investments; (iv) more than 13% of Triangle’s investment portfolio at cost was at risk of non-accrual and, thus, the fair value of the Company’s asset portfolio was artificially inflated; (v) Triangle had materially understated the number of loans performing below expectations and/or in non-accrual and had delayed writing down impaired investments; (vi) Triangle failed to implement effective underwriting policies and practices to ensure it received appropriate risk-adjusted returns on its investments; and (vii) as a result of the foregoing, Triangle Capital’s shares traded at artificially inflated prices during the Class Period, and class members suffered significant losses and damages.
On November 1, 2017, Triangle issued a press release announcing its financial results for the quarter ended September 30, 2017. The release revealed that the fair value of the Company’s investment portfolio had declined to $1.09 billion, a decline of nearly 7% from the prior quarter. In addition, the Company revealed that it had suffered $8.9 million in net realized losses and $65.8 million in net unrealized depreciation to its portfolio during the quarter. The Company also disclosed that it had only earned $0.36 per share in net investment income and that it was slashing its quarterly dividend to $0.30 per share, a decline of 33% from the prior quarter. Most shocking, Triangle revealed that it had placed seven new investments on nonaccrual status during the quarter, effectively acknowledging that those assets were unlikely to generate future returns, and that the amount of investments on non-accrual had ballooned to 13.4% and 4.7% of the Company’s total portfolio at cost and at fair value, respectively.
On these disclosures, Triangle Capital’s share price fell $2.57, or 20.98%, to close at $9.68 on November 2, 2017.
About USMA Law Group
U.S. Market Advisors Law Group PLLC is a national law firm based in Washington, D.C. The firm represents investors worldwide in U.S. securities class action lawsuits.
David P. Abel