On February 4, 2021, the SEC charged GPB Capital Holdings, its officials, and other affiliated entities with making material misrepresentations, violating whistleblower laws, and defrauding over 17,000 investors in a $1.7 billion Ponzi-like scheme.
In the complaint, the SEC alleges that David Gentile, GPB Capital’s owner and CEO, and Jeffry Schneider, owner of a GPB affiliate called Ascendant Capital, falsely told investors that an 8% annualized distribution payment came exclusively from monies generated by the company’s portfolio companies. In reality, the distribution came from new investor contributions.
The SEC also charged Jeffrey Lash, another GPB exec, with manipulating financial statements to further the Ponzi scheme and allege that GPB violated whistleblower laws by including language in its contracts that impeded potential whistleblowers and retaliated against a known whistleblower.
What About The Broker-Dealers Who Sold GPB Capital
GPB’s conducted its fraudulent scheme for more than 4 years. During that time, the broker-dealers who sold GPB Funds pitched attractive returns to investors. Unfortunately, it appears that these broker-dealers allegedly failed to perform adequate due diligence before pitching GBP to investors. Instead, the 8% commission they received for selling GPB funds may have incentivized them to turn a blind-eye to due diligence requirements. It now appears that brokers received more than $100 million in commissions for GPB investments.
More than 60 brokerage firms sold GPB, including Sagepoint Financial, Royal Alliance Associates, Woodbury Financial Services, and Triad. Silver Law Group is pursuing FINRA arbitration claims against many of these brokerage firms. Arete Wealth Management has already been ordered to pay $515,000 to its customers in a separate FINRA arbitration case.
Lost Money in GPB Funds? Here ‘s How To Contact Our Securities Fraud Attorneys
If you own shares of a GPB fund, you may have a claim to recover your money through a FINRA arbitration as well. Broker-dealers must perform the necessary due diligence to recommend suitable investments to their clients. And Investors have a right to bring a complaint to the FINRA arbitration panel if their broker-dealer fails to uphold that duty.
Silver Law Group is a nationally-recognized investment fraud and securities arbitration law firm with extensive experience recovering losses for investors through FINRA arbitration and in court. Our GPB attorneys have filed FINRA arbitration claims in multiple states and are committed to helping its client fight back against fraud.
If you need help with your GPB investment fraud case, please contact Scott Silver, chairman of the Securities and Financial Fraud Group of the American Association of Justice, for a free consultation at email@example.com or toll-free at (800) 975-4345.