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FINRA and SEC Follow Massachusetts in GPB Capital Investigations

After the state of Massachusetts began an investigation into 63 brokers selling private placements into GPB after the company stopped selling them, The SEC and FINRA have followed suit. Both agencies have launched their own investigations into the company and its practices.

The SEC Has Proposed New Regulations for Fiduciaries on silverlaw.comGPB announced in August that they would cease finding new investment money in order to focus on compliance and straightening out their accounting and financial statements for their two biggest funds. The SEC is, according to one executive, interested in seeing how accurate GPB’s disclosures are that were given to investors. The SEC also wants to review fund performances and distribution of the company’s capital to their investors, as well as broker-dealers who sold these private placements to investors.

Launched in 2013, GPB Capital became one of the fastest growing private placement firms selling shares of their funds through independent broker-dealers. Promoting themselves as offerors of alternative investment assets, New York-based GPB uses the business model of “acquiring income-producing private companies,” primarily auto dealerships. The company has raised $1.8 billion of investor funds.

Because these alternative investments are unregistered securities, they don’t have the same regulatory oversight as other investments. These investments carry a higher degree of risk, (along with a higher commission for the broker, 10% in GPB’s case) with less information available to an interested investor. Private placements are particularly risky.

Financial advisors have a duty to disclose any risks to a client as well as perform a suitability analysis for a client’s investment objectives. Brokers are also required by law to conduct due diligence before recommending any security to a client. Sagepoint Financial and several other independent broker-dealers were selling GPB Capital or GPB Automotive.

Did You Invest With GPB Capital?

Silver Law Group represents investors in securities and investment fraud cases. Our GPB Capital loss lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today and let us know how we can help.

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