GPB Capital Investor Recovery Options (2025)

On August 1, 2024, a federal jury in Brooklyn delivered a landmark verdict, finding David Gentile, founder and CEO of GPB Capital Holdings, and Jeffry Schneider, head of Ascendant Capital, guilty of fraud and conspiracy to commit securities fraud. The seven-week trial, which began on June 12, unveiled a sophisticated financial deception scheme that jeopardized over $1.8 billion raised from thousands of investors.

The U.S. Attorney presented charges against Gentile and Schneider, including wire fraud, securities fraud, and conspiracy. Prosecutors successfully demonstrated that the executives had orchestrated a Ponzi-like scheme, utilizing fraudulent back-dated documents and misusing investors’ funds to pay distributions, while concealing the firm’s financial difficulties and projecting a false image of success.

GPB Capital, a private equity firm facing civil fraud allegations since 2021, is now undergoing liquidation by a court-appointed receiver. This process will affect approximately 17,000 investors whose funds have been frozen since 2018. The Chief Judge of the U.S. District Court appointed a receiver to oversee the liquidation. The receiver, an experienced accountant who has been monitoring the situation, advocated for receivership to expedite the return of investor capital. This development marks a critical turning point for both the firm and the affected investors.

Investment options included GPB Capital, GPB Auto, and GPB/Armada Waste, each with different business models. Financial Advisors and firms recommending GPB often downplayed the issues, reassuring investors of eventual positive outcomes—claims not based on tangible facts.

There are 20+ pending litigations involving GPB, with criminal charges against executives and regulatory actions by multiple state regulators. Despite these complications, investors still hopefully await substantial payouts, which seem increasingly unlikely each day.

The SEC’s appointment of a Receiver temporarily halts legal and regulatory proceedings. The Receiver’s role includes managing assets and documentation. Unfortunately, the associated costs could significantly reduce the return of funds to investors.

Regulatory filings reveal GPB’s allocation of funds for future liabilities, including legal fees for ongoing disputes. The SEC’s recommendation for receivership remains under court consideration and is opposed by David Gentile.

Haselkorn & Thibaut continue to offer assistance with FINRA arbitration claims and a free “GPB Investors Guide” to help investors recover from losses by calling 1-888-994-8066.

GPB Capital Latest News: Broker-Dealers Fined $3.7M For GPB Capital Sales

FINRA fined fifteen broker-dealers a total of $3.7 million for private placements sold by GPB Capital Holdings as early as the spring of that year. When GPB didn’t submit audited statements to the SEC for its two largest limited partnerships, it sold the private placement to customers.

Firms’ repeated failure to notify customers of GPB’s deficiency was cited as the primary motivation for the Finra fines paid in the settlements.

Haselkorn & Thibaut calculated the average penalty was $247,000, whether as fines or restitution to clients. However, payments for lawyers representing clients meant higher costs to companies who the product’s broker wronged.

GPB Capital Lawsuit

The class action lawsuit against GPB was registered in a Texas US District Court. The Plaintiffs alleged that GPB Capital Holdings was operating a Ponzi scheme. Ponzi schemes always fail at the cost of investors’ funds. GPB allegedly tried to cover up the scheme by telling investors they would receive 8 per cent returns on their initial capital investment. GPB assured investors it would use income generated from private partnerships.

However, when investors weren’t paid, GPB argued that the returns/income would be distributed based on the partnership’s performance.

Investors understood that GPB Holdings was paying investors with new investors’ funds—a typical “Ponzi scheme.” Ponzi schemes are not new, and one of the largest was operated by Bernie Madoff, who stole over $17 billion.

Investors have seen their GPB capital funds raided by the Federal Bureau. Investigations by FINRA, Ponzi scheme allegations, and many more raise continuing concerns. Most investors were unaware of the losses to their GPB capital funds until notified by their broker-dealers. They were further shocked when they were told their GPB Capital funds were frozen.

GPB Capital Holdings was founded by David Gentile in 2013 and is headquartered in New York City. As an alternative asset management firm, it is believed to have raised $1.8 billion in several funds. GPB Capital Holdings (“GPB”) purportedly invests in waste management and automobile dealerships. GPB is under investigation by FINRA, the United States Securities and Exchange Commission (SEC), the Federal Bureau, and several state regulatory agencies in Massachusetts and New York. GPB reportedly paid more than $165 million in commissions to brokers and advisors recommending GPB funds to investors.

What is GBP Capital?

GPB Capital Holdings was founded by David Gentile in 2013 and is headquartered in New York City. The company is a New York-based alternative asset management firm that is believed to have raised 1.8 billion dollars in capital for several funds. GPB Capital Holdings (“GPB”) purportedly invests in (among other industries) waste management and automobile dealership businesses. GPB is under investigation by the Financial Regulatory Authority (FINRA), the United States Securities and Exchange Commission (SEC), the Federal Bureau of Investigation (FBI), and several states and/or local regulatory agencies (in Massachusetts and New York, and perhaps others as well). According to GPB, it raised $1.8 billion from investors and reportedly paid more than $165 million in commissions to brokers and financial advisors recommending GPB funds to investors.

David Gentile – GPB Founder

Investors have accused David Gentile of setting up a Ponzi scheme connected to a Russian crime figure. Federal court records of the GPB class action lawsuit allege that David Gentile was paying current investors with new investors’ money. The complaint alleges from financial statements that most of the $1.8 billion GPB funds generated went to the company’s principles.

GPB Capital Lawsuit

In recent months, the value of GPB’s funds has dropped dramatically as the company continues to miss filing deadlines. The company’s true valuation remains to be seen and has not been verified by any external auditor.

Many of the investments were private placements, which are classified as high-risk. Private placement investments should only be sold to high-net-worth and accredited investors.

The popular GPB holdings investments were the GPB Automotive Portfolio, GPB Holdings ii, and GPB Waste Management. These investments were often sold to investors as “income products.” Some products were listed under different names or companies, like Armada Waste Management being GPB Waste Management. The Ponzi scheme allegations range across the company’s portfolio, including 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, and GPB Waste Management LP formerly: GPB Waste Management Fund LP.

When reviewing your dealings with GPB holdings, check all records on file, in emails, correspondence, account statements, signed agreements, and other documents.

For example:

• What statements were given to you?
• What was the original cost of these investments when they were recommended to you?
• Has your financial advisor contacted you to review these investments and discuss their status? Did that discussion include or address the decline in value?
• Did the discussion involve your investment strategy and where these investments fit within that strategy?

GPB Capital Investigations

Recent media coverage may have ignited investors’ concerns about their GPB investment in mutual funds. Additionally, pending GPB investigations by FINRA, the SEC, the FBI, and several state and local regulators, along with pending lawsuits in multiple jurisdictions, will have also raised concerns:

• The firm ceased raising capital in 2018.
• The firm’s auditor resigned.
• The firm was publicly involved in a lawsuit with former business partner Patrick Dibre. GPB Capital Holdings alleged that Mr Dibre reneged on selling certain auto dealerships to GPB Capital Holdings, causing the fund to lose $40 million. Mr Dibre counterclaimed, alleging that GPB Capital Holdings is just “a complicated and manipulative Ponzi scheme. ” The firm is alleged to have paid large sums to investors based on bogus financial data, used an alternative and undisclosed investment strategy to produce dividends for investors, and falsified statements to conceal fraudulent activities.
• The Financial Industry Regulatory Authority Inc. (FINRA) opened an investigation.
• The SEC has launched an investigation.
• The State of Massachusetts has opened a pending investigation.
• As of March 2019, the firm is being investigated by the FBI.
• In June 2019, GPB revised its share price value, which reflected significant losses in mutual funds, some up to -74% of the original value.
• In October 2019, GPB’s Chief Compliance Officer was indicted.

GPB Capital Holdings Auditor Issues

In November 2018, GPB disclosed that the auditor for all GPB partnerships (Crowe LLP) resigned due to “perceived risks that Crowe determined fell outside of their internal risk tolerance.” See Cadez v. GPB Holdings, LP, et al (Del. Ch. CA No. 2019-0071-SG).

One year later, investors are still wondering about those perceived risks and what it means to them if they fall outside the auditor’s internal risk tolerance parameters.

GPB has never directly addressed these issues for investors. The Certified Financial Planners recommending investors continue to “hold” their GPB investments have no additional information to answer these questions.

Other GPB Capital News

In September 2018, a former compliance officer at one of the 63 broker-dealer firms selling GPB investment funds to public investors filed a federal lawsuit alleging that her broker-dealer (Purshe Kaplan Sterling Investments) sold GPB investments despite serious red flags.

In those allegations, information (from 2016) appeared to suggest conflicts of interest, including investor funds potentially being utilized for personal business interests. The alleged whistleblower believed that GPB funds should not have been approved for sale to retail investors on the broker-dealer firm’s platform. See: Toni Caiazzo Neff v. PKS Holdings, LLC et al E.D. Pa. 18-cv-01826.

In June 2019, National Financial Services, one of the largest clearing firms in the United States, reportedly removed GPB from its platform and gave clients only 90 days to move those investments to another custodian firm. The decision to remove GPB Funds from the National Financial Services platform was purportedly made because GPB has “no clear value.” A GPB executive was quoted (anonymously) to clarify that “…just because the custodian and clearing firm don’t have a value doesn’t mean there is no value in the security.” See Investment News, on 6/17/19, Fidelity’s National Financial Raises More Questions About GPB Private Placements. Such statements do not appear to be enough to calm most investors in light of the list of other prior events.

Later in June 2019, GPB informed investors that updated valuations had decreased even further, some by another -25%.

Despite these declines and negative events, many Certified Financial Planners continue to try to tell a positive story, but based on what facts or evidence, it’s unclear. Has your financial advisor contacted you to review the investment holdings and discuss the status after this additionally reported a decrease in value (as reported by the sponsor) or to share with you that the National Financial Services and other custodian providers are removing GPB Funds from their platform?

GPB Capital Holdings Lawsuit | Ponzi Scheme Allegations

Brokers and Certified Financial Planners selling GPB investments are believed to have received more than $165 million in commissions. Many investors did not realize that the brokers and financial advisors were highly motivated to sell GPB investments, as they earned upward of an 8% commission (often much more incentive than other investments that better suited the retail client investor’s goals and objectives). It is believed that some 6,000 investors have invested over $1 billion in GPB investments.

For brokers and financial advisors with a strong economic incentive to recommend clients invest in GPB, the question is often whether the broker-dealer firm properly and adequately reviewed the investment, properly approved it as a potential new product, and whether or not the individual financial advisor performed his or her due diligence correctly to determine that the investment was suitable at the time it was recommended. Similarly, did it become unsuitable for the investor over time?

For investors relying upon a financial advisor who owes a fiduciary duty, the applicable standard is higher, as they are required to put the client’s interests ahead of their own at all times. Due to GPB’s commission structure, the question in those cases may be whether 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.

“Financial advisors and brokers have legal and regulatory responsibilities to adhere to the rules and regulations of the securities industry.”

Financial advisors and brokers have legal and regulatory responsibilities to adhere to the rules and regulations of the securities industry. Financial advisors and brokerage firms recommending GPB investments to clients also had a duty to continue to monitor these investments as the information above has come to light. What did they know, what did they recommend, when did they recommend it to retail clients, and what exactly were those recommendations based upon? Were the representations fair and balanced in terms of risk disclosures?

What investor clients were (or were not) told at the time of the recommendation and later may also be a material issue as that information has unfolded.

Brokerage firms and financial advisors representing investors may also be responsible for conducting an investigation. Due diligence includes an initial investigation into the GPB investment, which includes potential benefits, risks, and tax consequences. It also includes reviewing and investigating GPB itself, the underlying business, the company’s history, key individuals, and other relevant factors, including potential conflicts of interest.

Further due diligence would identify issues concerning investors (compared to other potential investments), including high costs, commissions, and illiquidity. Similarly, conflicts of interest could make the investments unsuitable for retail investors or certain classes of investors, such as the elderly. In many cases, long-term and illiquid investments are less likely to suit the investment objectives, needs, or goals of an elderly or retired investor.

There may also be issues regarding whether due diligence files were properly updated as material issues, including those noted above, were made public or could have been discoverable by the firms.

What Should GPB Capital Investors Do?

First, be aware that investors have a limited time window to recover losses. There is a potential statute of limitations and potential FINRA customer dispute resolution rules, including a potential six-year eligibility rule. There are practical considerations, too, in cases where investors are aware of losses and potential claims but choose to delay taking action. With any investment fraud or Ponzi scheme, it is critical to take prompt action.

At Haselkorn and Thibaut, InvestmentFraudLawyers.com, our attorneys specialize in helping investors maximize the recovery of their investment losses. We have substantial experience pursuing claims against brokerage firms and financial advisors on behalf of investors nationwide. You should consult an attorney if you purchased GPB and have realized or unrealized investment losses. Our attorneys are available as a public service to review your investment accounts, counsel you, and answer your questions at no charge.

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

GPB Capital FAQ