Over the past few years, GPB Capital missed key Securities and Exchange Commission (“SEC”) filing deadlines, announced that some of its financial statements can no longer be relied upon, was raided by the FBI and New York City Business Integrity Commission, had one of its insiders criminally indicted, and is the subject of several civil lawsuits arising from its business practices, including a class action. The only thing missing are formal SEC charges against GPB.
Based on the foregoing, it should not be long before the SEC takes action, especially given the gravity of the allegations already looming against GPB in other lawsuits.
GPB is an alternative asset management firm focused on acquiring income-producing companies in several industries, including automotive retail dealerships and waste management. GPB raised more than $1.8 billion from investors through private placements. In the process, GPB paid broker-dealers more than $150 million in commissions.
The current allegations likely to lead to SEC action are that GPB engaged in serious financial misconduct amounting to a massive Ponzi scheme, specifically:
- GPB’s corporate structure was fraught with conflicts of interest that were not disclosed to potential investors so that GPB executives could unfairly profit from the scheme;
- GPB regularly reported that its funds were earning capital when they were in fact losing money; and
- GPB paid investors “returns” that were actually just investors’ own capital—the hallmark of a Ponzi scheme.
SEC Charges Against GPB
Given these allegations and the massive nature of the alleged fraud, it is only a matter of time before the SEC formally steps in. In fact, the SEC and Financial Industry Regulatory Authority (“FINRA”) are already investigating the broker-dealers who recommended GPB investments.
Did You Lose Money Investing In GPB Capital?
No matter what the SEC does, there still may be recovery available for you. GPB Capital funds are private placement investments, which are unsuitable for most investors given their highly complex and risky nature. Private placements are also not subject to many of the laws and regulations designed to protect everyday investors.
Silver Law Group has already filed claims on behalf of investors against some of the 60+ broker-dealers who improperly marketed and sold GPB to their customers, and the firm is continuing to investigate more of these claims every day. If you or someone you know invested in any of GPB’s offerings, please contact the Silver Law Group toll free at (800)-975-4799 or e-mail firstname.lastname@example.org for a confidential consultation.