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The future is uncertain for GPB Capital Holdings and its investors. As state and federal agencies investigate the troubled alternative asset management company, investors wait, unable to sell, wondering if the money they invested will evaporate. It wasn’t supposed to be this way. Clients were told by their brokers that GPB had solid assets and that investing in the company was low-risk. Sure a private placement in GPB was illiquid, but it would provide a healthy income stream for years to come, and one day the company could go public and make them a healthy profit, they said. Many investors did not appreciate that one of the primary guarantees for the selling brokerage firms was the substantial commission that GPB offered to pay the financial advisors who sold GPB Capital Notes. The future is uncertain for GPB Capital Holdings and its investors. As state and federal agencies investigate the troubled alternative asset management company, investors wait, unable to sell, wondering if the money they invested will evaporate.

It wasn’t supposed to be this way. Clients were told by their brokers that GPB had solid assets and that investing in the company was low-risk. Sure a private placement in GPB was illiquid, but it would provide a healthy income stream for years to come, and one day the company could go public and make them a healthy profit, they said.

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GPB Capital Holdings is being sued by one of its business partners, David Rosenberg, for allegations of financial misconduct. According to the lawsuit, Rosenberg is the chief executive of Prime Automotive Group. In 2017, he sold a majority stake in the company to GPB for $235 million. Rosenberg’s lawsuit accuses GPB of running like a Ponzi scheme by using investor’s money to pay other investors. He also alleges that GPB tried to force him out after he complained about their behavior to the SEC.GPB Capital Holdings is being sued by one of its business partners, David Rosenberg, for allegations of financial misconduct. According to the lawsuit, Rosenberg is the chief executive of Prime Automotive Group. In 2017, he sold a majority stake in the company to GPB for $235 million. Rosenberg’s lawsuit accuses GPB of running like a Ponzi scheme by using investor’s money to pay other investors. He also alleges that GPB tried to force him out after he complained about their behavior to the SEC. Continue reading

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Silver Law Group continues to file claims for investors who purchased GPB Capital. FINRA arbitration claims are being filed in an effort to recover the money investors lost alleging broker dealers were negligent. In many cases, investors are arguing that the brokerage firms who sold GPB to them failed to do adequate due diligence and/or overconcentrated their accounts in GPB. Silver Law Group has filed arbitration claims on behalf of clients who invested in GPB, including the first against Advisor Group broker-dealer SagePoint Financial, which requests $400,000 in damages.Silver Law Group continues to file claims for investors who purchased GPB Capital. FINRA arbitration claims are being filed in an effort to recover the money investors lost alleging broker dealers were negligent.

In many cases, investors are arguing that the brokerage firms who sold GPB to them failed to do adequate due diligence and/or overconcentrated their accounts in GPB. Continue reading

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Diamonds may still be a “girl’s best friend,” but for 300 or more investors in the US and Canada, they were allegedly used to defraud investors. This week, the SEC obtained a court order to shut down a Ponzi scheme run by South Florida-based owner Jose Angel Aman, and his company, Argyle Coin for allegedly operating a Ponzi scheme. Silver Law Group represents investors in this diamond Ponzi scheme.Using the classic model of collecting money and paying dividends to investors with money from new investors, Aman allegedly diverted much of the collected monies to himself for personal use. The Argyle scheme is tied into two other companies he owns, Natural Diamonds Investment Co., and Eagle Financial Diamond Group Inc. Harold Seigel and Jonathan H. Seigel, two stakeholders in these companies, worked with Aman to perpetuate and continue the scheme. All of the defendants reside in South Florida.Diamonds may still be a “girl’s best friend,” but for 300 or more investors in the US and Canada, they were allegedly used to defraud investors. This week, the SEC obtained a court order to shut down a Ponzi scheme run by South Florida-based owner Jose Angel Aman, and his company, Argyle Coin for allegedly operating a Ponzi scheme. Silver Law Group represents investors in this diamond Ponzi scheme. Continue reading

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The news keeps getting worse for GPB Capital. The troubled company reported Friday that the value of its two biggest investment funds, GPB Holdings II and GPB Automotive Portfolio, have declined by 25% and 39%, respectively.The other five GPB funds also have significant declines in value, according to the company.The news keeps getting worse for GPB Capital. The troubled company reported Friday that the value of its two biggest investment funds, GPB Holdings II and GPB Automotive Portfolio, have declined by 25% and 39%, respectively.

The other five GPB funds also have significant declines in value, according to the company. Continue reading

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Silver Law Group is investigating former Salinas, California-based, Independent Financial Group broker David Marshall after some customers have come forward alleging he recommended his customers invest with unregistered brokers. According to Marshall’s FINRA BrokerCheck report, Marshall was registered with Independent Financial Group at its Salinas, California branch from July 2015 to October 2017 and is now unregistered. Marshall ran his brokerage business through his own company, Marshall Wealth Management, according to his detailed CRD report. Marshall Wealth Management was also a registered investment adviser.Silver Law Group is investigating former Salinas, California-based, Independent Financial Group broker David Marshall after some customers have come forward alleging he recommended his customers invest with unregistered brokers.

According to Marshall’s FINRA BrokerCheck report, Marshall was registered with Independent Financial Group at its Salinas, California branch from July 2015 to October 2017 and is now unregistered. Marshall ran his brokerage business through his own company, Marshall Wealth Management, according to his detailed CRD report. Marshall Wealth Management was also a registered investment adviser. Continue reading

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Scott Silver, the managing partner of Silver Law Group, recently spoke to AutoNews.com for an article about GPB Capital’s ongoing legal troubles. GPB Capital investments were sold by SagePoint Financial, National Securities, and other brokerage firms.Scott Silver, the managing partner of Silver Law Group, recently spoke to AutoNews.com for an article about GPB Capital’s ongoing legal troubles. GPB Capital investments were sold by SagePoint Financial, National Securities, and other brokerage firms.

According to the article, GPB Capital Holdings is the majority owner of Prime Automotive Group, which is the 11th-largest dealership group in the country. GPB is the subject of federal and state investigations, and investors are concerned. There is concern that it could collapse and leave Prime without its majority investor and cause people who’ve invested in GPB to lose their money. Continue reading

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Boca-Raton-Oppenheimer-Employees-Settle-SEC-Investigation-300x208The CFTC, along with the Utah Department of Commerce, Division of Securities, through its Attorney General, jointly filed a civil enforcement action in the U.S. District Court for the District of Utah, Central Division. They filed against Gaylen Dean Rust and his business Rust Rare Coin (RRC). The complaint charges Rust and his company with committing fraud against approximately 200 individuals from Utah, and also from 16 other states. Rust allegedly obtained more than $170 million from investors since May 2013 in a precious metals ponzi scheme.

The complaint states that Rust’s fraudulent actions are ongoing. From January to August of 2018, Rust received $42 million from investors, which he claimed he used to buy and sell silver. He also allegedly attempted to solicit new investors recently.

On November 15, 2018, the U.S. District Court Judge for the District of Utah, Honorable Tena Campbell, entered a restraining order to freeze Rust’s assets and to permit the CFTC and State of Utah to inspect his records. Jonathan O. Hafen was appointed as a temporary receiver to take control of RRC and Rust’s assets.

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In August, we told you about John Cochran Maccoll (CRD #839441) who was barred by FINRA after multiple fraud allegations. Since then, there have been two additional developments.

Another customer has come forward and filed a complaint on 08/16/2018, alleging misappropriation of client funds from 10/01/2015 through 08/16/2018. The case was settled for $158,163.76. No additional information is available. This case is in addition to the previous cases we described in the earlier blog post.

The SEC Has Proposed New Regulations for Fiduciaries on silverlaw.comOn 8/9/2018, The U.S. Attorney’s Office for the Eastern District of Michigan filed criminal charges against Maccoll in an action initiated by the United States Securities and Exchange Commission (SEC.) In it, the SEC detailed how Maccoll persuaded investors, mostly elderly, into investing in what he described as a “highly sought after private fund investment.”  These investors, most of them retired, used their retirement accounts to fund their alleged investments. In return, Maccoll promised a 20% return on investment, as well as diversifying their portfolios and better growth potential than their current investment portfolios.

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Back in June, we told you about five former brokers charged by the SEC when the agency shut down their Ponzi scheme worth $102 million.

What-Keeps-a-Ponzi-Scheme-Running-300x200Scott Silver recently spoke with Jennifer Cefalu of WHEC News in Rochester, NY, where two of the suspects lived and the scheme originated. The scheme was run by Perry Santillo, Jr. and Chris Parris, with Santillo headlining.

Santillo, Parris and three others recruited their investors by word of mouth, after buying client lists from brokers. Ultimately, 637 people were defrauded, many in the Rochester area. The entities they represented were not registered with any federal agency like the SEC or FINRA, nor were any of them registered brokers or investment advisors.

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