GPB Capital – 6 Things to Worry Investors

GPB Capital Investigation – The firm that issued those investments now appears to be the subject of an FBI probe, as well as investigations by various regulators including the SEC, FINRA, and the State of Massachusetts. In addition, many investors are considering filing or have filled a GPB Capital lawsuit.

Many investors purchased GPB investments based on a broker or financial advisor recommending them as purportedly good income-producing investments. However many investors are now receiving notices that GPB Capital share prices have dropped.

GPB Capital Holdings is a New York based ‘alternative’ asset management firm that raised $1.5 billion dollars in capital.  There are currently 10 separate companies:

• GPB Automotive Portfolio, LP
• GPB Cold Storage, LP
• GPB Eurobond Finance PLC
• GPB Holdings II, LP
• GPB Holdings, III, LP
• GPB Holdings Qualified, LP
• GPB Holdings, LP
• GPB NYC Development
• GPB Scientific, LLC
• GPB Waste Management, LP formerly: GPB Waste Management Fund, LP.

What was the original basis that these investments were recommended to you?  Has your broker or financial advisor contacted you to review these investment holdings and discuss the status?  If so, was there a recommendation to continue to hold those investment positions? 

GPB Capital Investigation an Investor Nightmare

Investors have at least six reasons to worry about their GPB investments and GPB Capital Investigations:

1. The firm ceased raising capital last year. 
2. The firm lost an auditor and was publicly involved in a lawsuit with former business partner Patrick Dibre.  In that lawsuit GPB Capital Holdings alleged that Mr. Dibre reneged on the sale to GPB Capital Holdings of certain auto dealerships causing the fund to lose $40 million.  In his counterclaim in that lawsuit, Mr. Dibre alleged GPB Capital Holdings is nothing more than “a very complicated and manipulative Ponzi scheme” and the firm made large payments to investors based on bogus financial data, used an alternative and undisclosed investment strategy to produce dividends for investors and falsified financial statements to conceal its fraudulent activities.
3. It has been reported that the Financial Industry Regulatory Authority Inc. (FINRA) has opened a GPB Capital investigation.
4. It has been reported that the Securities and Exchange Commission (SEC) launched a GPB Capital investigation. 
5. The State of Massachusetts has opened a GPB investigation.
6. As of March 2019, the firm is being investigated by the FBI.

With thousands of concerned investors nationwide, you may wonder why do so many investors own GPB? 

Brokers and financial advisors selling GPB investments are believed to have received more than $100 million in commissions.  Many investors did not realize that the brokers and financial advisors were highly motivated to sell the GPB Capital investments as they earned an upward of an 8% commission (often much more incentive than other investments that better suited the client investor objectives.  It is believed that there are 6,000 investors that have invested over $1 billion in GPB investments.

For brokers and financial advisors with an incentive to push clients to invest in GPB, the question is often whether or not the investment was suitable at the time it was recommended?  Did it become unsuitable for the investor over time?  For those investors relying upon a financial advisor that owed a fiduciary duty, the standard is higher, as they are required to put the client’s best interest ahead of their own.  The question in those cases may be whether or not the financial advisor had a conflict of interest or otherwise breached his or her fiduciary duty by stepping in front of the client’s best interest as a result of the commission structure of the GPB investments?   

Financial advisors and brokers have legal and regulatory responsibilities to adhere to the rules and regulations of the securities industry. Financial advisors and brokers recommending GPB investments to clients also had a duty to continue to monitor these investments as the information above has come to light.  What investor clients were (or were not) told as that information has unfolded may also be a material issue. 

In addition to the above, brokers and financial advisors have a responsibility to conduct due diligence.  Due diligence includes an initial investigation into the GPB investment and that includes potential benefits, risks, tax consequences, GPB itself, the underlying business, the history of the company or business as well as key individuals, and other relevant factors.  Appropriate due diligence would further identify issues that concern investors (compared to other potential investments) including high costs, high commissions, illiquidity, and conflicts of interests that would make the investment not suitable for investors.  There may also be issues as to whether or not due diligence files were properly updated as material issues including those noted above were made public.

Time is Running Out – What Should GPB Capital Investors Do?

Many investment companies have declared bankruptcy and left their investors holding the bag. There is limited time window for an investor to recover losses.

At Haselhorn and Thibaut, InvestmentFraudLawyers.com, our attorneys specialize in helping investors recover losses. We have substantial experience pursuing claims against brokerage firms and financial advisors on behalf of investors nationwide.

Broker Dealers And Financial Firms Selling GPB Capital

Broker Dealers That Sold GPB Capital

Over 60 broker dealers sold GPB Capital Funds.   It has been reported that commission were as high as 10% commission that resulted in over $100 million in GPB Capital commissions paid to broker dealers.  Here is a list of firms that sold GPB Capital:

• Axiom Capital Management, Inc., NY, NY
• Ascendant Alternative Strategies, LLC, NY, NY (AKA Ascendant Capital)
• Accelerated Capital Group, Costa Mesa, CA
• Advisory Group Equity Services LTD, Woburn, MA
• Aegis Capital Corp., NY, NY
• American Capital Partners, LLC, Happauge, NY
• Arete Wealth Management, LLC, Chicago, IL
• Arkadios Capital, Atlanta, GA.
• Ausdal Financial Partners, Inc., Davenport, IA.
• Avere Financial Group, LLC., Englewood, CO. (AKA Parsonex Capital Markets)
• BCG Securities, Inc., Cherry Hill, NJ (AKA BCG Wealth Management, AC Capital Mgmt, Aspen Wealth Mgmt, Balanced Security Program)
• Benjamin & Jerold Brokerage I, LLC, NY, NY
• Cabot Lodge Securities, LLC, NY, NY
• Calton & Associates, Inc., Tampa, FL
• Cape Securities, Inc.,McDonough, GA.
• Capital Investment Group, Inc., Raleigh, NC.
• Center Street Securities, Inc., Nashville, TN.
• Coastal Equities, Inc., Wilmington, DE.
• Concorde Investment Services, LLC, Livonia, MI.
• Crystal Bay Securities, Inc., Delray Beach, FL.
• Emerson Equity, LLC, San Mateo, CA.
• Geneos Wealth Management, Inc., Centennial CO.
• McNally Financial Services Corp., San Antonio, TX.
• Kalos Capital, Inc., Alpharetta, GA.
• IBN Financial Services, Inc., Liverpool, NY.
• Crown Capital Securities, L.P., Orange, CA.
• Money Concepts Capital Corp., Palm Beach Gardens, FL.
• National Securities Corporation, Seattle, WA.
• Orchard Securities, LLC, Lehi, UT.
• Pariter Securities, LLC., Guaynabo, PR.
• Sandlapper Securities, LLC, Greenville, NC.
• Vestech Securities, Inc., St. Louis, MO.
• Stephen A. Kohn & Associates, LTD, Lakewood, CO.
• Western International Securities, Inc., Pasadena, CA.
• International Assets Advisory, LLC., Orlando, FL.
• Hightower Securities, LLC., Chicago, IL.
• Innovation Partners, LLC, Charlotte, NC.
• Kingsbury Capital, Inc., Evanston, IL.
• Sentinus Securities LLC, Oakbrook, IL. (AKA Halo Securities).
• Vanderbilt Securities, LLC., Woodbury, NY
• Westpark Capital, Inc., Los Angeles, CA.
• Colorado Financial Service Corporation, Centennial, CO.
• David A. Noyes & Company, Chicago, IL. (AKA Acorn Advisors, Bayley Investment Group, Cerulean Private Wealth Advisors, Cooke Financial Group)
• Dawson James Securities, Inc., Boca Raton, FL.
• Dempsey Lord Smith, LLC, Rome, GA. (AKA, there are 36 other business names affiliated with this BD, see Brokercheck).
• DFPG Investments, Inc., Sandy, UT. (AKA includes 17 other business names affiliated with this BD, see Brokercheck).
• Dinosaur Financial Group, LLC, NY, NY.
• FSC Securities Corporation, Atlanta, GA.
• Great Point Capital, LLC, Chicago, IL.
• Landolt Securities, Inc., Oshkosh, WI.
• Lewis Financial Group, LC, Shreveport, LA. (AKA DAI Securities in MN).
• Lowell & Company, Inc., Lubbock, TX.
• Madison Avenue Securities, Inc., San Diego, CA.
• McDonald Partners, LLC, Cleveland, OH.
• Moloney Securities, Co., Inc., Manchester, MO.
• MSC-BD, LLC, Cumming, GA.
• Newbridge Securities Corporation, Boca Raton, FL
• Purshe Kaplan Sterling Investments, Albany, NY.
• Royal Alliance Associates, Inc., Jersey City, NJ.
• Sagepoint Financial, Inc., Phoenix, AZ.
• SCF Securities, Inc., Fresno, CA.
• Silber Bennett Financial, Inc., Encino, CA.
• Triad Advisors, LLC, Norcross, GA.
• Uhlmann Price Securities, LLC., Chicago, IL.
• Whitehall-Parker Securities, Inc., San Francisco, CA.
• Windsor Street Capital, LP., NY, NY. (formerly Meyers Associates)
• Woodbury Financial Services, Inc., Oakdale, MN.