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.
GPB Holdings II and GPB Automotive Portfolio raised $1.27 billion from investors, most of the $1.5 billion that independent broker-dealers sold to investors as private placements. Even at these reduced valuations, GPB investors have no willing buyers and are forced to hold and risk further reductions in price.
Brokerage Firms Who Sold GPB Offer Limited Information
GPB is under investigation by federal and state agencies, and is accused of being a Ponzi scheme. In April 2018, they missed a deadline to report financial information on their biggest funds. In December 2018 they stopped paying distributions to investors. Whether or not the company and its funds can survive remains to be seen.
With all those problems, investors are beginning to sue the broker-dealers who advised them to buy GPB’s high-risk alternative investments so they can recover their losses alleging, in many cases, that the brokerage firm failed to do adequate due diligence or overconcentrated these investor’s accounts in GPB.
Silver Law Group has filed the first arbitration claim against Advisor Group broker-dealer SagePoint Financial related to GPB Capital investments. The claim, filed on behalf of a client who invested in the GPB’s automotive fund, is for $400,000. The firm’s managing partner, Scott Silver, recently spoke to InvestmentNews.com about GPB.
“There was a lack of due diligence. Clients were assured that the assets were strong, their principal was secure and the private placements would provide an income stream for years to come,” Silver told the site about the claim’s allegations.
More of the broker-dealers that sold GPB investments can be found here.
SagePoint and GPB
GPB Capital Holdings buys companies like auto dealerships with the money it raises by having financial advisers sell “private placements” to investors. Private placements involve significant risk, are illiquid, and are not suitable for many investors’ goals. But they were appealing to many investors because of the high return they were supposed to pay. SagePoint and other broker-dealers sold GPB to many investors in exchange for substantial commissions.
Recovering GPB Losses Through FINRA Arbitration
If you purchased GPB Capital, you may have a claim to recover your money. Broker-dealers have an obligation to recommend suitable investments to their clients and perform due diligence into the products they sell them. FINRA-registered brokers and firms are subject to arbitration to resolve securities-related disputes.
Silver Law Group represents the interests of investors who have been the victims of investment fraud. Scott Silver is the chairman of the Securities and Financial Fraud Group of the American Association of Justice and represents investors nationwide in securities investment fraud cases. Please contact Scott Silver of the Silver Law Group for a free consultation at firstname.lastname@example.org or toll free at (800) 975-4345.