No one enjoys losing money on investments. Still, investors can feel even worse if they lost money because they invested in funds that their financial advisor or brokerage firm didn’t properly vet. Investors in GPB Capital Holdings may find that they are facing this exact situation. In parallel actions filed on February 4, 2021, the SEC and the United States Department of Justice 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 that lasted more than 4 years.
Though the loss of money alone isn’t an indication of bad financial advice, when it comes to investments in GPB, there may be other indications that advisors failed to uphold their fiduciary duties.
Financial Advisor Standards
The Financial Industry Regulatory Authority (FINRA) promulgates several rules governing the duties, responsibilities, and behavior of advisors and brokers. When it comes to the GPB Capital Holding cases, the most relevant of these rules are misrepresentation and suitability.
Advisors and brokers have a duty not to omit facts or promote falsehoods about investments. If they engage in omissions of fact or promote falsehoods, then they could be charged with misrepresentation under FINRA rules.
Broker-dealers also are required to make investments that are suitable for a customer’s investment objectives. If, for example, an investor is conservative and risk-averse, FINRA rules prohibit advisors from providing risky investment advice unsuitable for that investor’s desires.
Advisors and GPB Capital Due Diligence
Though the full extent of the advisors’ liability in the GPB Capital Holdings matter is unknown, what is clear from recent FINRA decisions is that several broker-dealers were found to have failed to uphold their duties to their clients. Investors can recover for their losses due to that negligence.
Experienced GPB Fraud Attorneys
Silver Law Group is a nationally-recognized investment and securities fraud law firm with extensive experience recovering losses for investors through FINRA arbitration and in court. If you experienced loss due to a GPB investment, 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.