GPB Capital has started the year by hiring a new CEO of Prime Automotive Group. Last month David Rosenburg filed a lawsuit to regain control of Prime Automotive, claiming Kevin Westfall (now the former CEO) lacked moral character.
GPB Capital CEO Rosenberg Lawsuit
The former longtime CEO, David Rosenberg, was fired (or “relieved of his duties”) last September, a few months after he had accused GPB of financial misconduct in a Massachusetts state superior court Complaint in July of last year alleging GPB Capital was engaged in a “massive securities fraud” and that he faced retaliation after he took steps to reveal it.
According to Palm Beach, Florida investment fraud lawyer, Matthew Thibaut, Esq. of Haselkorn & Thibaut, P. A., it appears that GPB investors were recently notified on 1/7/20 a new CEO for Prime Automotive Group was appointed effective 1/1/20.
His lawsuit goes on to allege the retaliation involved GPB breaching his contract and denying him $5.9 million that he was owed. Mr. Rosenberg maintained these allegations when he filed an Amended Complaint in late November of last year.
Rosenberg sold his majority stake in Prime Motor to GPB Capital for $235 million in 2017. GPB Capital Attorney Tab Rosenfield said Rosenberg is a disgruntled employee.
GPB Capital Lawsuit From Investors
GPB Capital is at the center of several other legal actions involving charges of fraud and operating an illegal Ponzi-like scheme. GPB Capital has also allegedly been under investigation by state and federal authorities (including FINRA and the SEC) for potential securities law violations or other improprieties. The FBI also made an unannounced search of the GPB Capital offices last February.
Mr. Thibaut, who represents investors, also noted that “… many financial advisors and broker-dealer firms have been telling their clients to ‘hold on’ and ‘hang in there’ for several months now when their investor clients are asking about GPB investments and those promises over most of the past year have hinged upon GPB being able to point to some kind of positive news or positive financial performance. A bog pin was stuck in that balloon back in June 2019, when investors found out there were declines of as much as 70% in their GPB investments…”
The Arrest of GPB Capital Chief Compliance Officer
An indictment was unsealed in October 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.”
GPB Capital Purshe Kaplan Sterling Whistle-Blower Lawsuit
In 2016 Caiazzo Neff worked at Purshe Kaplan Sterling as in compliance when she was asked to do due diligence on GPB Capital. She recommended that Sterling have nothing to do with them. Management at Sterling overrode her and decided to sell GPB Capital Funds. Neff then reported the situation to FINRA and was fired.
Her federal whistle-blower lawsuit against Sterling was dismissed last year because she went to FINRA first. Neff recently came forward after the arrest of Michael Cohn, GPB Capital’s Compliance officer.
GPB Capital Scare Tactics
She says that since Cohn’s arrest, GPB Capital and people have been using scare tactics to intimate and silence her. Neff says people have been following her and messing with her car.
What Should GPB Investors Do?
GPB Capital investors may choose to continue sitting on the sidelines, but keep in mind that there are time limits applicable to potential claims that any GPB investor might be able to bring. GPB investors should consult with an experienced investment attorney regarding their potential claims.
Advice or recommendations to GPB investors to “wait” and not take any action may not be in the best interest of the investor and might be coming from a self-serving source.
Haselkorn & Thibaut, a national investment fraud law firm, is offering free case consultations for GPB Capital investors. They can be reached by calling +1 888-628-5590 or visiting their website.
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