Securities-Backed Lines of Credit (SBLOC)

SECURITIES-BACKED LINES OF CREDIT ATTORNEYS IN NEW YORK

Lose Money in an SBLOC? We Will Advocate for You!

Often promoted as an easy, low-risk investment, securities-backed lines of credit (SBLOCs) in fact come with many risks that the average investor may not be aware of. The SEC has long warned that investors must keep those risks in mind, especially as SBLOCs are on the rise.

If you have suffered unjustified losses due to the misinformation provided by your broker or have been unduly pressured to invest in SBLOCs despite your lack of understanding, you have legal recourse.

The attorneys at Weltz Law can help you explore your legal options and assist you in making a positive recovery. Call (877) 905-7671 for a FREE consultation.

What Is a Securities-Backed Line of Credit?

SBLOCs are often marketed as a quick and easy way to liquidize assets within a given portfolio, freeing up cash flow. They are also often referred to as securities-based lines of credit, securities-based lending (SBL), or investment-backed loans.
In short, SBLOCs do this by borrowing against other asset holdings within the portfolio. Requiring only monthly interest payments, the value of the assets is used as collateral and made into an outstanding line of credit.

Note that the investor can continue to trade assets while holding an SBLOC. The principal can be paid back at any point they wish.

Stocks, bonds, and mutual funds can be held as collateral in SBLOCs. Their flexibility and ease of use make them an attractive option for many. Add in the various opportunities that are freed up with an increased cash flow—such as the purchase of real estate, home improvements, and vehicle financing—and it’s easy to see why so many investors buy into SBLOCs.

Proving SBLOC Losses

The SEC has recognized that the facts surrounding SBLOCs leave huge room for misinterpretation and misrepresentation from broker to investor, whether deliberate or unintentional. As such, they have published additional information regarding the risks of investing in SBLOCs and advising investors to take note of how they are marketed.
Although SBLOCs are often marketed as a way to increase portfolio value, they also expose the investor to higher market volatility, among other risks.

Recovering Damages from SBLOC Losses

Your broker is duty bound to ensure that you are fully aware of all the potential risks and rewards associated with an investment product before investing on your behalf.

However, it has been proven many times that not all brokers exercise their duty to the highest degree of care. Some may have failed to fully consider if SBLOCs fit with your financial goals and risk profile before recommending it; others may have pressured their clients to invest in a certain product for their own financial gain.

Meet with Our Attorneys to Discuss Your SBLOC Losses

Have you been unduly pressurized or misguided to invest in SBLOCs despite not being fully aware of the risks?
If you have suffered unjustified financial losses due to broker negligence or fraud, you have legal recourse. Our knowledgeable attorneys at Weltz Law are here to help with a collective experience of over 30 years in securities litigation. We can assist you with exploring your legal options and starting the recovery process.