If you are have suffered losses in GPB Capital Holdings or one of its affiliated funds, you may be able to pursue recover your losses through FINRA arbitration. Please call Kons Law Firm at (860) 920-5181 for a FREE, NO OBLIGATION consultation to discuss your investment loss recovery options.
GPB Capital Holdings Investors Can Pursue Recovery of their Losses
If you have suffered losses in the GPB Holdings, you may be able to pursue recovery of those losses through FINRA arbitration against the broker or brokerage firm that sold this investment to you for due to the lack of or improper due diligence on GPB, or for an inappropriate level of risk that you were exposed to on your GPB investment. Contact Kons Law Firm today at (860) 920-5181 for a FREE, NO OBLIGATION consultation to discuss your GPB investment loss recovery options.
GPB Capital Holdings Sued by the SEC for Running a $1.7 Billion Ponzi Scheme Victimizing 17,000 Investors Nationwide
On February 4, 2021, the Securities and Exchange Commission charged three individuals and the GPB Holdings affiliated entities with running a Ponzi-like scheme that raised over $1.7 billion from 17,000 investors nationwide.
The SEC’s complaint alleges that David Gentile, the owner and CEO of GPB Capital, and Jeffry Schneider, the owner of GPB Capital’s placement agent Ascendant Capital, lied to investors about the source of money used to make an 8% annualized distribution payment to investors. According to the SEC, these defendants along with Ascendant Alternative Strategies, which marketed GPB Capital’s investments, told investors that the distribution payments were paid exclusively with monies generated by GPB Capital’s portfolio companies. As alleged, GPB Capital actually used investor money to pay portions of the annualized 8% distribution payments. GPB Capital and Gentile with assistance from Jeffrey Lash, a former managing partner at GPB Capital, also allegedly manipulated the financial statements of certain limited partnership funds managed by GPB Capital to perpetuate the deception by giving the false appearance that the funds’ income was closer to generating sufficient income to cover the distribution payments than it actually was.
The SEC also alleged that the fraudulent scheme continued for more than four years in part because GPB Capital kept investors in the dark about the limited partnership funds’ true financial condition, failing to deliver audited financial statements and register two of its funds with the SEC. GPB Capital allegedly violated the whistleblower provisions of the securities laws by including language in termination and separation agreements that impeded individuals from coming forward to the SEC, and by retaliating against a known whistleblower.
In a separate indictment that was unsealed in federal court in Brooklyn, charged three individuals affiliated with GPB Capital Holdings with securities fraud, wire fraud and conspiracy. Defendants David Gentile, the founder, owner and Chief Executive Officer (“CEO”) of GPB; Jeffry Schneider, the owner and CEO of Ascendant Capital LLC (“Ascendant”); and Jeffrey Lash, a former managing partner of GPB, were charged with engaging in a scheme to defraud investors by misrepresenting the source of funds used to make monthly distribution payments to them and the amount of revenue generated by two of GPB’s investment funds, GPB Holdings, LP and GPB Automotive Portfolio, LP. The defendants were arrested on February 4, 2021.
Investors Have GPB Investment Loss Recovery Options
Investors in any of the following GPB Capital funds have the opportunity to pursue recovery of their investment losses against the broker or brokerage firm that sold GPB to them. These funds include the following:
- GPB Automotive Portfolio, LP
- GPB Holdings II, LP
- GPB Holdings, III, LP
- GPB Holdings Qualified, LP
- GPB Holdings, LP
- GPB Cold Storage, LP
- GPB Eurobond Finance PLC
- GPB NYC Development
- GPB Scientific, LLC
- GPB Waste Management, LP formerly: GPB Waste Management Fund, LP.
Securities broker-dealers have a regulatory duty to have reasonable grounds to believe that a recommendation to purchase, sell or exchange a security is suitable for the customer. This “reasonable-basis” suitability requirement means that in the context of private placements like GPB Capital, GPB Automotive, GPB Holdings, or any of the other funds, brokerage firms have a duty to conduct due diligence on:
-The issuer and its management;
-The business prospects of the issuer;
-The assets held by or to be acquired by the issuer;
-The claims being made; and
-The intended use of proceeds of the offering.
A securities broker-dealer that lacks essential information about an issuer or its securities when it makes a recommendation, including recommendations private placements like the GPB Capital, must disclose this fact as well as the risks that arise from its lack of information. In addition, a brokerage firm “may not rely blindly upon the issuer for information concerning a company,” nor may it rely on the information provided by the issuer and its counsel in lieu of conducting its own reasonable investigation.
GPB Holdings Investors May Be Able to Pursue Recovery of their Losses through FINRA Arbitration
If you are have suffered losses in GPB Capital Holdings or any of its affiliates, you may be able to pursue recovery of your losses through FINRA arbitration against the broker or brokerage firm that sold an investment in GPB to you. Please call Kons Law Firm at (860) 920-5181 for a FREE, NO OBLIGATION consultation to discuss your GPB investment loss recovery options.
Kons Law Firm represents investors throughout the US in securities arbitration and litigation matters. To learn more about the Firm’s securities litigation and FINRA arbitration practice, please visit www.investmentlossattorney.com.