More negative news for GPB Capital investors. An indictment was unsealed today in federal court in Central Islip by charging Michael S. Cohn, Managing Director and Chief Compliance Officer of GPB Capital Holdings, LLC (GPB), with obstruction of justice, unauthorized computer access and disclosure of unauthorized confidential information. This GPB news comes after nearly a year of barrage of negative news for GPB Capital Investors that included investigations by state agencies, the SEC and a raid by the FBI.
Richard P. Donoghue, US Attorney General for the Eastern New York Area, William F. Sweeney, Jr., Assistant Assistant Director, Federal Bureau of Investigation, New York Field Office (FBI), and Carl W. Hoecker, The Chief Inspector of the Office of the Inspector General of the SEC has announced the charges.
“As alleged in the replacement indictment, the defendant misused the trust which was inserted as an SEC employee, preventing an active investigation,” said the US Attorney General. “No one gets a pass to overcome the security of government computer networks and to abuse sensitive and confidential information on their own interests. during the investigation.”
“When Cohn left the SEC to enter the GPB, he left more than his own career ambitions. The proprietary information it received alleged – from databases that it was not authorized to access – included information on infringement of the GPB investigation and sensitive data relating to it. The charges announced today reflect the FBI’s commitment to protecting the securities industry, as well as protecting the confidential information necessary for the success of our investigations, ”said Sweeney, Assistant Assistant Director of FBI.
“The charges announced by the Office of the Attorney General reflect the commitment of the Office of the Inspector General to investigate individuals who hamper SEC enforcement activities,” said Commission General Inspector Hoecker.
GPB Capital Lawsuit
Several investors have filed GPB Capital lawsuits against the broker-dealers and advisors that sold them GPB Capital.
Matt Thibaut, Partner at Haselkorn & Thibaut, a national investment fraud law firm, said the following: “we have received many inquiries from investors across the country that have concerns about their GPB Capital investments.”
Thibaut continues, “We have over 40 years of experience in securities law and GPB Capital appears to be a significant and wide-spread problem.” In recent months, they have initiated investigations into Hightower Securities, Royal Alliance, FCS Securities, Woodbury, Madison Avenue Securities, Dawson James Securities, and 60 other broker-dealers.
There is a limited time for GPB investors to file claims to recover investment losses. Investors seeking to recover losses or consider options can get a free case and portfolio review by calling 1-888-628-5590.
GPB Capital Investigation
As set out in the indictment and other court documents, Cohn had previously worked as Securities and Industry Compliance Examiner in the Enforcement Division of the SEC, where he assisted investigations into breaches of securities laws. In October 2018, Cohn left the SEC to enter GPB, a private equity firm based in Manhattan and Garden City, New York, which manages over $ 1.5 billion in assets. However, before leaving the SEC, Cohn accessed access to information on CSS servers relating to an Enforcement Division’s investigation of GPB. Cohn was not authorized to access this very sensitive content, including confidential information, a privileged attorney work product and contacts with law enforcement agencies and other regulatory agencies. During discussions with GPB personnel regarding the acquisition of a job, Cohn informed them that he had inside information on the SEC’s investigation, and often disclosed information to senior management members of the GPB about this investigation.
The charges in the indictment are reputed, and the defendant is presumed innocent unless proved guilty and proved guilty. If convicted, Cohn has a maximum sentence of 20 years on counting the barrier of justice, a maximum of five years in prison on the unauthorized computer access count and a maximum of one year’s imprisonment for the unauthorized number of computer disclosures.
The Government Department is dealing with the Business and Security Fraud case and the Office’s National Security & Cybercrime Departments. US Auxiliary Solicitors Artie McConnell and Lauren Howard Elbert are in charge of the prosecution.