The Securities and Exchange Commission (SEC) recently charged three individuals, and their affiliated entities, for running a Ponzi-like scheme and infringing the whistleblower protection laws. The fraud, which raised over $1.7B, was conducted through securities issued by GPB Capital.
The SEC's complaint alleges that David Gentile (owner and CEO of GPB Capital) and Jeffrey Schneider (owner of Ascendant Capital, GPB Capital's placement agent ) misled clients about the origin of the money used to make 8% annualized distribution payment to investors.
GPB & Gentile Ran The Ponzi-Like Scheme For Over 4 Years
GPB Capital and Gentile, with help from Jeffrey Lash (an ex-managing partner at GPB Capital), also supposedly manipulated the financial statements of certain limited partnership funds managed by the firm to perpetuate the deception. These statements gave the misleading appearance that the funds' income was closer to generating sufficient income to satisfy the distribution payments than it actually was.
The authorities further allege that GPB Capital and Ascendant Capital made misstatements to investors about millions of dollars in fees and other Gentile and Schneider's compensations.
GPB Hid Financial Statements and Kept Investors in The Dark
According to reports, the fraudulent scheme continued for more than four years in part because GPB Capital kept from investors the limited partnership funds' real financial condition — failing to deliver audited financial statements with the SEC.
More so, GPB Capital ostensibly broke the securities laws' whistleblower provisions by including language in termination and separation agreements that prevented individuals from coming forward to the authorities.
As a result, the SEC complaint charges Mr. Gentile, Mr. Schneider, Mr. Lash, GPB Capital, and Ascendant Capital with infringing the antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Advisers Act custody and compliance rules.
The complaint seeks disgorgement of ill-gotten gains and prejudgment interest and penalties.
Think You Have a GPB Case? Speak with an Experienced Attorney
Were you a victim of the GPB Ponzi scheme? If you or someone you know has lost money as a result of the GBP scheme, speak to an experienced investment fraud attorney today. Dimond Kaplan & Rothstein, P.A. has vast experience with cases related to Ponzi schemes and recently won an arbitration case against a firm for selling risky placements in the GPB fund to its clients. We will aggressively pursue claims to recover your losses as a result of GPB Capital Holdings.
Contact a Dimond Kaplan & Rothstein Attorney Today
To schedule an appointment for a FREE case evaluation, contact partner Jeffrey Kaplan at Dimond Kaplan & Rothstein, P.A. today. We’ll review your rights and options and determine the best course of action.
With offices located in Los Angeles, New York, Detroit, West Palm Beach, Naples, and Miami, we represent clients nationwide. Translation services are available.
