GPB Capital Holdings Causes Investor Losses | DKR Investigation
Dimond Kaplan Rothstein is investigating brokerage firms that recommended that their customers invest in GPB Capital Holdings’ high-risk, high-commission private placements, including two of GPB’s funds — GPB Automotive Portfolio and GPB Holdings II. It appears that investors may lose a significant amount of money after GPB Capital Holdings failed to file required SEC reports in April 2018 and securities regulators have launched investigations into GPB Capital Holdings and brokerage firms’ sales of GPB’s private placements.
GPB Capital Holdings LLC started in 2013, buying auto dealerships. It reportedly has raised money from approximately 4,000 investors. The GPB Automotive Portfolio reportedly raised $622 million, with a minimum investment of $100,000, and GPB Holdings II reportedly raised approximately $650 million. GPB Capital Holdings reportedly has raised a total of $1.5 billion.
Numerous Brokerage Firms Sold GPB Private Placement Securities
GPB reportedly relied on numerous FINRA brokerage firms to sell its funds, including:
Royal Alliance Associates Inc.
Sagepoint Financial Inc.
FSC Securities Corp.
Woodbury Financial Services Inc.
It is believed that brokerage firms Newbridge Securities, Ladenburg Thalmann, and Hightower Securities also sold GPB Capital Holdings Funds.
The brokerage firms and brokers working at those firms were incentivized to sell the GPB funds by commissions rates of nearly 8%. GPB is said to have paid more than $100 million in commissions to brokers and brokerage firms that sold the risky GPB private placements.
GPB Capital Holdings’ Trouble
According to public reports, trouble for GPB started in 2017 when it sued a former business partner who allegedly reneged on a sale of multiple car dealerships. Among other claims, GPB Capital Holdings sought the return of $42 million it had paid to the former business partner.
Then, in April 2018, GPB Capital Holdings, failed to provide the SEC with required financial reports and a few months later announced that no new investor capital would be accepted. According to public reports, the firm is “straightening out” the accounting for two of its larger funds – GPB Holdings II and GPB Automotive Portfolio.
Shortly after GPB’s announcement, Massachusetts securities regulators announced an investigation into 63 broker-dealers who allegedly sold GPB private placements. GPB’s auditor also recently resigned, citing perceived risks, and securities regulators FINRA and the SEC also have launched independent investigations into GPB Capital Holdings and those broker-dealers that sold GPB Funds.
Investors May Have a Claim to Recover GPB Capital Holdings Losses
We believe that investors who suffer GPB Capital Holdings losses may have valid claims to recover those losses from the brokerage firms that sold the investments.
Investors often are attracted to the high-income often touted by private placements. But private placements generally are risky, illiquid, and unsuitable for many investors. Unfortunately, some brokers, potentially motivated by high-commissions payments, may have run afoul of industry rules, laws, and regulations when recommending and selling the GPB funds.
In addition, brokerage firms that sold the GPB Capital Holdings investments may not have conducted adequate due diligence on the GPB funds before allowing their brokers to sell the products. As a result, brokerage firms may be liable for GPB investors’ losses for allowing unsuitable GPB investment sales, failing to properly supervise brokers who sold the GPB funds, and for failing to conduct required due diligence of GPB before allowing brokers to sell the funds.
Speak with an Investment Fraud Attorney about Your Losses
If you or someone you know lost money with GPB Capital Holdings, GPB Automotive Portfolio, or GPB Holdings II we recommend you seek the advice of a lawyer experienced in representing investment fraud and stockbroker negligence victims to discuss your rights and options.
Dimond Kaplan & Rothstein, P.A. has vast experience in representing investors who have sustained losses due to the negligence or misconduct of their broker and/or brokerage firm, including many cases involving risky private placements. We will aggressively pursue claims to recover your investment losses from the brokerage firms that sold the GPB Capital Holdings investments.
Contact Dimond Kaplan & Rothstein Today
If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. represent individual and institutional investors who have lost money as a result of investment fraud or stockbroker misconduct. We’ve recovered more than $100 million in assets lost to investment fraud and stockbroker misconduct.