If you are an investor with a complaint regarding GPB Capital, you should contact an investment fraud lawyer to recover your losses. They will be able to help you understand your rights. The SEC is trying to force GPB Capital Holdings LLC into receivership to return investor funds to those who were allegedly cheated out of their money. Correction Added 8-29-22 Re Mr. Cohn.
The SEC is presenting its plan to a federal judge, and investors may be entitled to financial restitution. GPB Capital is currently under a court-appointed monitor that is preventing the company from taking any action that may harm investors. However, the SEC is not allowing the company to do so if it is not complying with the law.
GPB Capital Holdings is under investigation by multiple federal and state regulatory agencies. In November, the SEC announced that it was investigating the firm. As a result, the firm’s former auditor and audit committee resigned.
The FBI and Massachusetts Secretary of Commonwealth have also launched investigations into the company. GPB Capital Holdings has been forced to change its accounting firm from Crowe LLP to EisnerAmper LLP, which some investors view as a red flag.
Table of Contents
GPB Automotive Portfolio
In June 2019, GPB Capital’s Automotive Portfolio LP stopped paying distributions to limited partners. The company has been accused of financial misconduct. In addition, the company cannot issue Schedule K-1 tax documents before tax day.
GPB Capital Holdings II LP and GPB Automotive Portfolio LP were suspended in August 2018 due to declining fund values. Both funds are offered to investors through registered brokers and financial advisors. As a result, investors must continue to hold these funds and hope they don’t drop more than the original investment amount.
Further price declines are possible, but the fund has not been transparent about the cause. If you’re thinking about investing in GPB Capital’s Automotive Portfolio, you should keep in mind that this investment has a high risk of loss.
While GPB Capital’s Automotive Portfolio has largely failed to meet investor expectations, some investors have filed lawsuits seeking monetary recovery. This litigation was filed by investors who purchased limited partnership interests in GPB Automotive through a brokerage firm.
As of April 2018, the brokerage firm failed to produce audited financial statements for GPB Automotive investors. This means investors who invested in the fund in the company’s Automotive Portfolio have the right to file a securities arbitration suit against the firm.
GPB Holdings II
The sale of investments in GPB Holdings II LP has been suspended since August 2018. These private entities offered investors a way to purchase shares in GPB Automotive. They were sold through registered brokerage firms and financial advisors.
However, in recent months, the value of the investment funds in GPB has been declining. Here is a look at the company’s recent history. Let’s review the key facts about GPB Holdings II.
The company was founded by Joseph Gentile, an investment advisor based in New York. He served as a general partner of various investment funds. Schneider was a former partner of GPB and worked together to develop and operate the GPB Funds.
He was subsequently censured by FINRA and ordered to pay $9 million in fines and penalties. However, he is still presumed innocent until proven guilty.
The SEC has now opened an investigation into GPB Capital Holdings. The company failed to file the required financial statements by April 30, and the SEC has said it will cease accepting new investments. Meanwhile, GPB has halted investor redemptions. In addition, Massachusetts securities regulators have formally investigated GPB Capital Holdings II. This investigation is ongoing, but the firm has promised to make all necessary financial disclosures.
GPB Holdings Qualified
The value of investment funds in GPB Holdings Qualified Securities has decreased dramatically in recent months. The company has missed numerous filing deadlines and has been accused of operating a Ponzi scheme.
No outside auditing firms have inspected GPB’s books, and its fund valuation has not been independently verified. Further, many of the investments in GPB’s portfolio were private placements, which are only offered to accredited investors and high-net-worth individuals. As a result, the investments in GPB are extremely risky.
The company’s investment funds include GPB Holdings LP, GPB Holdings ii, GPB Automotive Portfolio, and GPB Waste Management. The holding companies were sold to investors as income products under different names or affiliated companies. The company’s portfolios also include GPB Holdings II and GPB Holdings Qualified. Additionally, GPB Holdings LP and GPB Holdings Qualified LP have launched funds for investment in GPB’s other portfolios.
The latest announcement from GPB Capital Holdings, LLC is that it has sold a 30-acre parcel of land in New Jersey. The company did not release the terms of the sale, but the Wall Street Journal reported that the net proceeds of the sale will go to investors of GPB Cold Storage.
Although GPB did not comment on the deal, it did say that the 30-acre parcel of land was valued at $78.3 million.
According to the complaint, GPB Capital Holdings failed to disclose third-party transactions and relationships with certain investors. The company is allegedly owned indirectly by Ascendant Alternative Strategies, a firm that was founded by GPB founder David Gentile and Jeffry Schneider, a “strategic advisor” for the company.
Consequently, the Securities Division has filed this lawsuit against Gentile and Ascendant Alternative Strategies, which are affiliated with GPB Capital Holdings. The Securities Division seeks to impose a financial penalty against the company and a permanent bar from its registration with the state. It is also suing Gentile and Schneider for properly disclosing their relationships with third parties.
Since this news broke, the company’s investment funds have dropped dramatically. The company continues to miss deadlines and has been accused of running a Ponzi scheme.
In addition, the value of GPB’s funds has not been independently verified by outside auditors. Further, many of the investments made by GPB were private placements, which are supposed to be sold to high-net-worth and accredited investors only. Therefore, GPB’s investments are very risky.
Investigations by FINRA
There are currently two ongoing investigations regarding GPB Capital Holdings. First, the SEC has opened an investigation into the company’s public disclosures of inside information, as well as its distribution of capital.
Second, the FBI has opened an investigation into GPB’s business practices. The FBI visited GPB’s Manhattan offices last year, but the company says the visit was a continuation of ongoing inquiries.
The investigation is the result of a number of complaints filed against the firm by investors. While the SEC is investigating the firm’s sales practices, FINRA’s investigation focuses on whether financial advisors are properly investing investors’ money.
Among those involved are financial advisors who recommended unsuitable investments to clients. Some of these brokers are associated with brokerage firms such as Sagepoint Financial Inc., FSC Securities Corp., and Woodbury Financial Services Inc.
Following the SEC’s investigation, Geneos Wealth Management was also implicated in violating FINRA Rules 3110 and 2010 relating to the sale of GPB Capital’s securities. Geneos Wealth Management learned of GPB Capital in February 2015, and later approved the sale of a different limited partnership, GPB Automotive Portfolio, to investors in September 2015.
Raids by FBI
The SEC’s investigation focused on the accuracy of financial disclosures, the performance of various funds, and the distribution of capital among investors. Since then, GPB has been strengthening its oversight and auditing practices.
Despite these efforts, the FBI raided GPB Capital’s Manhattan offices. Additionally, the New York City Business Integrity Commission, which regulates public wholesale markets and private carting industries, also investigated GPB.
The investigation stems from a series of incidents involving GPB Capital Holdings. The company is a New York-based alternative asset management firm that has raised more than $1.8 billion in the capital.
GPB purportedly invests in businesses in the waste management industry and the auto dealership industry. Several registered representatives from dozens of independent brokerage firms have also sold GPB’s high-risk private placements.
The SEC’s investigation also relates to a lawsuit filed by a former partner of GPB. The former business partner claimed that GPB was running a Ponzi scheme. In addition to a faulty Ponzi scheme, GPB failed to disclose its income and expenses properly.
Furthermore, it failed to hire independent auditors to determine the value of its funds. Moreover, many of GPB’s investments were private placements that are intended for high-net-worth individuals and accredited investors. This makes them extremely risky.
Complaints by FINRA
A new FINRA investigation has exposed numerous violations by GPB Capital Holdings. According to a FINRA complaint, the firm defrauded more than 17,000 investors of nearly $1.7 billion. The complaint also accuses GPB Capital of operating a Ponzi-like scheme.
Despite their high fees, investors were promised 8 percent or more returns. However, the investors’ losses exceeded their initial investments.
The firm’s management team has extensive experience in the automotive retail, life sciences, and Managed IT services sectors. Its investment process entails a high degree of risk, and a number of customers have lost a lot of money. In recent months, the value of GPB’s funds has declined dramatically. It has also failed to file its required regulatory filings with the SEC, which has fueled allegations of a Ponzi scheme.
Further, many of GPB’s investments were made through private placements, which are only suitable for accredited investors. As a result, these investments have high levels of risk.
As a result, the firm has settled the charges filed against it. A settlement agreement between FINRA and GPB Capital Holdings was reached, and Dempsey Lord Smith and the firm were fined a combined $70,000 and ordered to pay restitution of almost $30,000.
In addition, a separate FINRA complaint alleges that the company failed to file its required SEC filings on time and that these failures arose because of poor management.