A class action lawsuit accuses BlackRock TCP Capital Corp. of overstating its net asset value and misleading shareholders about the true health of its portfolio.
The suit, filed in the United States District Court for the Central District of California, names the business development company and three executives as defendants: former CEO Raj Vig, current CEO Phil Tseng, and CFO Erik L. Cuellar. The case covers investors who purchased BlackRock TCP securities between November 6, 2024 and January 23, 2026.
The allegations center on claims that BlackRock TCP, which pools investor capital to extend loans to middle-market companies, failed to properly value its investment portfolio and painted an overly rosy picture of its financial condition.
The company had assured investors that all investments were valued at least quarterly based on independent third-party pricing, with limited exceptions comprising less than 5 percent of assets. The lawsuit contends these representations were materially misleading because investments were allegedly not being valued in a timely or appropriate manner.
The numbers tell a stark story. BlackRock TCP reported NAV per share of $11.90 as of December 31, 2023. A year later, that figure had dropped 22.44 percent to $9.23 per share. But even that diminished valuation may have been too generous, the lawsuit claims.
On January 23, 2026, the company revealed that NAV per share actually stood between $7.05 and $7.09 as of December 31, 2025, representing a 19 percent decline from the prior quarter and a 23.4 percent slide from the prior year.
Investors reacted swiftly. Shares tumbled $0.76, or 12.97 percent, to close at $5.10 on January 26, 2026, on heavy trading volume. That followed an earlier selloff on February 27, 2025, when shares dropped $0.90, or 9.64 percent, to close at $8.44.
The lawsuit paints a picture of executives offering reassurances even as the portfolio deteriorated. In November 2024, the company reported its portfolio showed signs of improvement. By February 2025, management maintained that the vast majority of holdings continued to perform well. As recently as November 2025, executives expressed encouragement about progress in resolving troubled credits.
Meanwhile, the data suggested otherwise. Debt investments on non-accrual status ballooned by 289 percent, climbing from 3.7 percent to 14.4 percent of the portfolio at cost.
The lawsuit brings claims under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, as well as Section 20(a) claims against the individual executives.
The case remains in its early stages, with no determination yet made on the merits of the claims. The defendants have not filed responses.
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