Investors were pitched attractive returns offered GPB and the broker-dealers who offered the GPB Funds. Brokers, however, were motivated by the 8% commission for selling GPB funds. It now appears like agents received over $100 million in commissions.
According to its website,” GPB Capital is a New York-based alternative asset management company focusing on getting income-producing private businesses.” Of note, GPB has a strong focus on the “automotive retail” sector. Since 2013, GPB increased $1.3 billion from investors in its GPB Automotive Portfolio and GPB Holdings II funds (“GPB Funds”).
GPB Capital Holdings Fraud Lawsuits & Investigation
In July 2017, GPB entered lawsuit Against a former business partner who allegedly reneged on a sale of multiple car dealerships. Since the lawsuit continues, additional problems for GPB have started to surface:
- April 2018: GPB failed to produce audited financial statements;
- August 2018: GPB declared no new investor funding would be approved;
- September 2018: Massachusetts Division of Securities launches investigation
- November 2018: GPB’s auditor resigned, citing perceived risks; and
- December 2018: FINRA and SEC launch investigations into broker-dealers that marketed GPB.
Investment Loss Recovery Group is currently investigating complaints from investors against GPB Capital Holdings Group. Investors can click here or call toll free 1-888-628-5590.
According to InvestmentNews, “As many as 60 broker-dealers have marketed GPB funds. While many were smaller [independent broker-dealers] IBDs, one of the most prominent listed in Securities and Exchange Commission filings were four Advisor Group broker-dealers: Royal Alliance Associates Inc., Sagepoint Financial Inc., FSC Securities Corp., and Woodbury Financial Services Inc.”
Brokers licensed with FINRA are required to follow the rules, laws, and regulations when recommending the purchase or sale of a security. Additionally, the broker-dealers are required by law to supervise broker activities.