Articles Tagged with GPB

Chicago-based Stoltmann Law Offices has represented investors who’ve suffered losses from brokers whose firms promote high risk alternative investments and private placements. Did you know that brokerage firms can be held accountable when their brokers sell high-risk, illiquid investments that are unsuitable for their clients? Such was the case with Sanctuary Securities, which was forced to pay more than $530,000 in fines and restitution to investors for  “failures to supervise certain product sales,” according to Advisorhub.com.

Sanctuary was fined $160,000 and ordered to pay restitution of $370,161.39 plus interest “for the various supervisory failures dating as far back as 2014 that were uncovered over multiple FINRA examinations, according to a letter of acceptance, waiver and consent finalized on July 1.” Formerly David Noyes and Company, Indianapolis-based Sanctuary has about 190 registered brokers and 35 offices. The company said that no current employees were involved in this action. The FINRA enforcement action involved the firm’s sales of money-losing, risky products called “leveraged exchange-traded funds (ETFs).” These investments multiply gains and losses based on market movements of popular securities indexes. These “non-traditional” or “alternative” investments can lose money for investors if brokers or investors guess wrong on market movements.

According to FINRA, from January 2014 through December 2018, “Sanctuary did not sufficiently address the unique features and risks related to solicited sales of inverse and leveraged ETFs (collectively, non-traditional ETFs) as required by suitability obligations under FINRA Rule 2111. Around 30 brokers recommended customers purchase about $5 million worth of non-traditional ETFs, resulting in significant net losses for those who held their positions for extended periods of time. The firm, meanwhile, generated roughly $60,000 in commissions over the course of about 600 purchases in 150 customer accounts,” FINRA stated.

Chicago-based Stoltmann Law Offices is currently representing investors who’ve suffered losses from financial advisor and brokers who sold them private offerings in GPN Automotive Fund, GPB Holdings Fund II, and GPB Waste Management Fund.

Earlier this year, executives with GPB Capital were indicted for fraud and allegedly running a $1.8 billion Ponzi scam involving more than 17,000 investors. Also involved in the swindle were 60 broker-dealers who sold the GPB “private placements” to investors, reaping 8% commissions on each sale, based on shoddy due diligence.

Financial advisors and brokers who sold GPB limited partnerships could be on the hook as investors attempt to recover their losses. Jeffery Raymond Dixson, a former broker registered with Madison Avenue Securities in Vancouver, Washington, for example, faces multiple investor disputes for selling GPB vehicles.

Chicago-based Stoltmann Law Offices, P.C. represents GPB investors in claims against brokerage firms and financial advisors who solicited investments in the GPB Capital Funds.  GPB was named in a criminal indictment by the U.S. Department of Justice on February 4. GPB’s top executives were charged with fraud and running a Ponzi scheme. The government charged three GPB executives — David Gentile, Jeffrey Schneider and Jeffrey Lash — with securities fraud, wire fraud and conspiracy.

According to Investment News, “GPB raised $1.8 billion from investors starting in 2013 through sales of private partnerships, but it has not paid investors steady returns, called distributions, since 2018. More than 60 broker-dealers partnered with GPB to sell the private placements and charged customers charged clients commissions of up to 8%.” Stoltmann Law Offices pursues those brokerage firms for their investor-clients to recover GPB losses.

Gentile, the owner and CEO of GPB Capital, and Schneider, owner of GPB Capital’s agent Ascendant Capital, are charged with lying to investors about the source of money used to make 8% annualized investor payments, according to the SEC’s complaint. Using the marketing broker-dealer Ascendant Alternative Strategies, GPB told investors that the unusually high payments were paid exclusively with monies generated by GPB Capital’s portfolio companies, the SEC alleged. At first glance, the distributions were highly appealing to investors, since ultra-safe U.S. Treasury Notes are yielding around 1%.

Chicago-based Stoltmann Law Offices is representing investors who’ve suffered losses from investments in GPB Capital Holdings. The company, named in civil and criminal complaints, is alleged to be part of a massive Ponzi scam. The U.S. Securities and Exchange Commission (SEC) recently filed a $1.7 billion civil complaint against GPB Capital, its owners, officers, and affiliates, alleging a massive multi-year securities fraud, which will likely be devastating to investor fund holdings.

In recent years, GPB and the brokerage firms sold it to about 17,000 retail investors nationwide. The company told clients to “wait it out” and that “GPB will be fine.” Investors have been told repeatedly that the only issue with GPB was its inability to produce audited financial statements. GPB is now alleged to be a massive securities fraud scheme by the SEC. Criminal charges have also been filed.

According to the SEC complaint, filed on Feb. 4, “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. 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.”

Stoltmann Law Offices, a Chicago-based investor rights and securities law firm, has been representing investors in cases against brokerage firms that sold the private placement limited partnership offerings in several GPB Funds, including:

  • GPB Automotive Fund
  • GPB Holdings Fund II

Chicago based Stoltmann Law Offices, P.C. has been representing GPB investors in FINRA Arbitration cases since January 2019.  Our securities lawyers continue to file claims against brokerage firms involving solicitations to invest in GPB Automotive Fund, GPB Holdings Fund II, GPB Waste Management, and GPB Cold Storage.  These claims are for violating FINRA rules and regulations in connection with offering speculative private placements to clients, fraud, and violations of state securities regulations.

On February 4, 2020, the Securities and Exchange Commission dropped the hammer on GPB, its funds, its owners. The complaint filed by the SEC alleges that GPB ran a massive securities fraud scheme for at least four years, defrauding investors of upwards of $1.7 billion.  Over the last few years, Stoltmann Law Offices has spoken to hundreds of GPB investors and many of them were not ready to move forward with claims against the brokerage firms responsible for selling them GPB based mostly on the ongoing representation of both GPB and their financial advisors that “everything will be fine” and “GPB just needs to get the audits done and you’re investment will come back.”  These dilatory and lulling tactics started with GPB and filtered through to financial advisors who were more concerned for their own best interests as opposed to what was in the best interest of investors.

INVESTORS NEED TO ACT NOW TO PRESERVE THEIR CLAIMS. Contact Stoltmann Law Offices at 312-332-4200 for a free, no obligation consultation with a securities attorney to determine whether you have a viable case against the brokerage firm that sold you GPB.  

Chicago-based securities law firm Stoltmann Law Offices continues to represent investors in FINRA arbitrations nationwide recovering losses suffered in the GPB Capital Holdings group of funds, including the GPB Automotive Fund, GPB Holdings Fund II, and the GPB/Armada Waste Management Fund.

One of the appealing pitches that broker-dealers and investment advisers offer is the opportunity to invest in private companies with outstanding earnings potential, or in the case of GPB, relatively high annualized “interest” payments. Instead of buying shares in public companies on stock exchanges, the advisers sell interests in “closely held” companies, which are not listed on exchanges and not required to openly disclose their financial statements.

One such company was GPB Capital Holdings LLC, which has been the subject of federal and state litigation. GPB Capital is a New York City-based alternative investing firm that “seeks to acquire income-producing private companies.” So-called private placements have posed problems for investors in recent years because of sketchy financial disclosure and overselling.

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