July 20, 2026, No. 2:26-cv-01102

By David Brunk, civil litigation attorney

Read the complaint

In re BlackRock TCP Capital Corp. Securities Litigation

Cory Burnell has initiated a class action lawsuit against BlackRock TCP Capital Corp., along with its executives, accusing them of violating federal securities laws. Filed on February 3, 2026, in the United States District Court, the complaint alleges that BlackRock TCP and its leadership engaged in a scheme to mislead investors about the company’s financial health and portfolio valuation.

The plaintiff contends that BlackRock TCP, a business development company investing in middle-market enterprises, overstated its net asset value (NAV) and concealed material weaknesses within its portfolio. The complaint asserts that Defendants overstated NAV and failed to disclose material weaknesses in the company’s portfolio, including improper or untimely asset valuations, ineffective portfolio restructuring, and understated unrealized losses. When the truth about the company’s financial condition was revealed, BlackRock TCP’s stock price plummeted, causing significant losses for investors.

Alleged Mechanism of Securities Fraud

The complaint accuses BlackRock TCP Capital Corp. ("BlackRock TCP") and several executives of misleading investors by overstating the company's net asset value (NAV) per share and failing to disclose significant portfolio weaknesses during the class period from November 6, 2024, to January 23, 2026. These alleged misrepresentations pertain to improper asset valuations, ineffective portfolio restructuring, and understated unrealized losses, according to the filing.

According to the complaint, despite internal knowledge of these financial inadequacies, BlackRock TCP and its executives presented the portfolio as "well-diversified" with strong capital and liquidity positions. The lawsuit highlights that these assertions were materially false, referencing specific disclosures in a Q4 2024 press release that indicated a 22.44% decline in NAV per share and a 289% rise in debt investments on non-accrual status.

Further allegations include claims that less than 5% of assets were independently valued by a designated Valuation Designee, raising concerns about the authenticity of BlackRock TCP's asset valuations. This deficiency, coupled with overstated NAV figures, allegedly led to an artificial inflation of the company's securities, causing investors to make decisions based on misleading financial information.

The complaint details the impact of these alleged financial misstatements, asserting that once the true financial condition was revealed, BlackRock TCP’s stock price experienced significant declines, notably on February 27, 2025, and January 26, 2026. These price drops resulted in substantial economic losses for investors who were unaware of the purported misrepresentations during the class period.

These allegations are part of counts asserting violations under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, as well as Section 20(a) of the same Act, targeting both direct falsehoods and lack of disclosure by individuals with oversight responsibility. The complaint characterizes these acts as materially misleading, resulting in damages to the plaintiff and similarly situated investors.

Cory Burnell, the lead plaintiff, along with the class, is represented by attorneys Robert V. Prongay and Charles H. Linehan. These allegations remain unproven, and none of the defendants have filed a response as of yet.

Financial Impact and Losses

The complaint alleges significant financial losses tied to BlackRock TCP Capital Corp.'s reporting of its financial condition. For the fiscal year 2024, BlackRock TCP reported $194,895,042 in total realized and unrealized losses, which the complaint highlights as a 186% increase compared to the previous year. The complaint contends that the company’s financial misrepresentations led to these losses.

The announcement of BlackRock TCP's Q4 2024 results had an immediate impact on its stock price. On February 27, 2025, following the release of these results, BlackRock TCP's stock price dropped by $0.90 per share, representing a 9.64% decline. This significant decrease, the complaint contends, reflects investor reaction to the revealed extent of the company's losses, which were allegedly concealed during the reporting period.

Further stock devaluation occurred nearly a year later on January 26, 2026, after BlackRock TCP disclosed its Q4 2025 results. This disclosure led to another sharp stock price decline, with a drop of $0.76 per share, equating to a 12.97% decrease. The plaintiff argues that this decline further evidences how the previous overstated NAV and undisclosed financial vulnerabilities impacted investor trust and the market value of the company.

Throughout the challenged period, BlackRock TCP reported various fluctuations in its net assets from operations. There was a $51.3 million net decrease in net assets from operations (GAAP) for Q2 2024, and similarly significant decreases were reported for other periods, such as a $21.6 million net decrease for the quarter ended 09/30/2024, and a $38.6 million net decrease for the quarter ended 12/31/2024. However, the company also reported a $20.9 million net increase for Q1 2025 and a further increase of $24.4 million during Q3 2025, showcasing a complex financial landscape over the class period. For Q2 2025, a net decrease in net assets from operations was noted at $15.9 million (Compl. ¶53).

The NAV per share of BlackRock TCP also underwent significant changes during the class period. It started from $11.90 as of 12/31/2023, dropped to $10.20 as of 06/30/2024, and further declined to $10.11 as of 09/30/2024. By 12/31/2024, it had dipped to $9.23, indicating a 22.44% year-over-year decline. It continued to fall to $9.18 as of 03/31/2025, $8.71 as of both 06/30/2025 and 09/30/2025, and a preliminary figure of $7.05–7.09 by 12/31/2025, illustrating a 19% drop from the prior quarter and further losses year-over-year.

These reported financial impacts are central to the plaintiff’s claim that BlackRock TCP and its executives engaged in fraudulent practices that resulted in significant economic losses to investors, as the company’s securities were allegedly traded at artificially inflated prices during the Class Period.

Parties and Their Roles

The class action lawsuit, led by Cory Burnell as the lead plaintiff and class representative, has been filed against BlackRock TCP Capital Corp. and several of its top executives. The defendants in the case include BlackRock TCP Capital Corp., along with its current CEO Phil Tseng, former CEO Raj Vig, and CFO Erik L. Cuellar. These individual defendants are named based on their roles within the company during the specified period of alleged misconduct.

BlackRock TCP Capital Corp., commonly referred to as "TCP" or "the Company," operates as a business development company (BDC). The company provides senior secured loans to middle-market companies that typically have enterprise values ranging from $100 million to $1.5 billion. Investors depend on the company's reported net asset value (NAV) per share to evaluate its financial health and influence their trading actions.

Phil Tseng, who has served as CEO since November 7, 2024, and is also Chairman of the Board, is one of the key executive defendants accused of failing to ensure accurate financial disclosures. Raj Vig, the former CEO, held his position from August 5, 2021, until November 6, 2024, which encompasses part of the class period when the alleged misconduct occurred. Erik L. Cuellar, the CFO, is cited as a defendant due to his oversight of the company's financial operations throughout the relevant time frame.

While not named as defendants, the Valuation Designee and the Board of Directors played significant roles in the investment valuation policy at BlackRock TCP Capital Corp. Their responsibilities included the approval and implementation of procedures for pricing the company’s investments. According to the complaint, less than 5% of BlackRock TCP's assets were valued directly by the Valuation Designee, which raises questions about the accuracy and independence of the valuations conducted on the remainder of the company’s portfolio.

The allegations in this complaint remain unproven at this stage, and none of the defendants have yet filed a response. Legal proceedings will aim to determine whether the claims of misleading investment valuations and inaccurate financial disclosures hold merit.

Robert V. Prongay and Charles H. Linehan represent the plaintiff Cory Burnell in the matter.

Securities Law Violations Under Section 10(b) and Rule 10b-5

The complaint in Cory Burnell v. BlackRock TCP Capital Corp. alleges that all defendants violated Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. These sections require accurate disclosures to prevent misleading investors regarding a company's financial status. Plaintiff Cory Burnell, representing a class of similarly situated shareholders, contends that BlackRock TCP and its executives made public statements which significantly overstated the company's financial health and the true value of its portfolio. According to the filing, these misrepresentations caused BlackRock TCP's market price to trade at inflated levels during the specified class period (¶64).

The complaint asserts that these false and misleading statements included overly optimistic assessments of the company's financial condition and asset valuations, which did not reflect underlying weaknesses. As reported in the complaint, these misstatements were material to investors, who rely heavily on accurate disclosures of a business development company's net asset values to evaluate financial performance. By maintaining an artificially high market price, alleged the plaintiff, "Defendants’ wrongful conduct directly caused economic loss to Plaintiff and the Class" (¶53).

Moreover, the filing suggests that the defendants acted with scienter, meaning they knew—or recklessly disregarded—the truth about the company's actual financial state. It was asserted that BlackRock TCP knowingly employed schemes intended to defraud investors, making untrue statements and engaging in practices that inflated the market price of its securities (¶69). The legal standard for scienter is crucial in securities fraud cases; proving that the defendants acted with this level of intent strengthens the allegations under Section 10(b) and Rule 10b-5. As such, the plaintiff believes this misleading conduct resulted in substantial damages to shareholders when the true conditions were revealed.

The plaintiff's accusations highlight a significant area of concern in securities litigation where companies are alleged to manipulate their market prices through deceptive reporting practices. According to the complaint, the defendants’ conduct caused the class to purchase shares at inflated prices, culminating in financial losses when accurate information surfaced (¶70). These claims under Sections 10(b) and Rule 10b-5 seek to hold the defendants accountable for their alleged roles in promulgating the alleged falsehoods.

It should be noted that these allegations remain unproven, and no responses from defendants are yet part of the court record. Robert V. Prongay and Charles H. Linehan represent the plaintiff in this matter.

Control Person Liability Under Section 20(a)

The complaint asserts liability under Section 20(a) of the Securities Exchange Act of 1934 against the individual defendants at BlackRock TCP Capital Corp., namely former CEO Raj Vig, current CEO and Chairman Phil Tseng, and CFO Erik L. Cuellar. This section targets so-called "control persons" who had the power to direct the company’s actions and the creation of its public statements, which were allegedly misleading.

The plaintiff contends that these individual defendants exerted substantial control over BlackRock TCP’s decision-making processes and corporate communications. The complaint alleges they were in positions that empowered them not only to influence corporate policy but also to ensure the issuance or correction of public disclosures claimed to be false and misleading. Specifically, the individuals were said to have access to internal financial data and reports, and thus had the capacity to either intervene in or approve information disseminated to the market.

As controlling persons, Raj Vig, Phil Tseng, and Erik L. Cuellar are alleged to have contributed to, or failed to prevent, the dissemination of misrepresentations regarding the financial health of BlackRock TCP. The complaint maintains that as a consequence of their supervisory and operational roles, they bear joint liability for any primary securities law violations committed by the corporation itself, under the statutory framework provided in Section 20(a).

The plaintiff further argues that these individual defendants knowingly or recklessly permitted the misleading statements to persist and affect public market perceptions, leading to inflated share prices during the class period (¶74). Consequently, they are held accountable for the resulting investor losses, as the revelations later diminished these inflated values when the true financial state of the company was disclosed.

The allegations regarding Section 20(a) remain unproven, and the defendants have not yet filed a response to the complaint at this time.

Distinctive Elements of the Case

The complaint in the case of Cory Burnell v. BlackRock TCP Capital Corp. highlights several distinctive elements concerning the valuation of BlackRock TCP's assets and the accuracy of its financial disclosures. A key point of contention is that less than 5% of the company's assets were independently valued by the Valuation Designee, calling into question the accuracy of the remaining valuations controlled internally. The complaint suggests that this lack of independent assessment could lead to overstated net asset values (NAV), which are crucial for investors in assessing the company's financial health.

The plaintiff further alleges that BlackRock TCP misled investors by falsely asserting improvements in the company's portfolio, particularly concerning non-accrual loans. In press releases and SEC filings, defendants allegedly assured investors that progress had been made in reducing non-accruals, which are loans not generating expected income. These reassurances allegedly contributed to artificially inflated stock prices. Specific statements from press releases falsely touted financial improvements, thereby creating a misleading narrative about the company's overall stability and performance (¶41).

The significance of these allegations is underscored by their potential impact on investor decisions. With a substantial portion of the portfolio valued without independent oversight, and assurances of portfolio health being questioned, the lawsuit challenges the integrity of the information provided to the market, which purportedly led to severe investor losses when the true financial condition was revealed. According to the plaintiff, these circumstances allowed BlackRock TCP's securities to trade at inflated prices during the defined Class Period, directly contributing to financial damages suffered by the plaintiff and other class members (¶56).

These allegations form a critical part of the plaintiff’s case against BlackRock TCP and its executives, which asserts that the company engaged in practices that both misrepresented and omitted crucial financial information. Such practices are alleged to have violated federal securities laws, namely Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, as well as liability claims against controlling persons under Section 20(a).

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

David Brunk is a civil litigation attorney. He can be reached at david@newmanbrunk.com.