Investors of GPB or any GPB Capital investments, please call 1-866-817-0201 about potential loss recovery. Initial consultations are free and confidential. Jeffrey Pederson is a private attorney who has successfully represented investors nationwide in obtaining settlements or judgments for investment losses.
Information exists to support that GPB Capital was inappropriately sold by independent brokerage firms across the country. These investments are now illiquid and essentially worthless. These brokerages are liable for the losses of their investors.
Brokerages have duties to investors in the sale of investments such as GPB. These investments were high-risk, and brokerage were only allowed to recommend the investments to
On August 17, 2018, the firm halted sales to review accounting. The purported reason was to “integrate the high volume of recent acquisitions.”
On August 24, 2018, GPB announced that the fund will restate its 2015 and 2016 financial statements. The adjustments were due to errors in income and the source of such income that came to light in audits done on the investments.
On September 12, 2018, Massachusetts top securities regulator William Galvin started an investigation into the sales practices of independent stock brokerage firms in connection with the recommending of investments in GPB Capital Holdings.
GPB investments were always known to be very high risk. As such, the investments were not suitable for a large portion of the investing public. Brokers have a legal obligation to only recommend suitable investments. The motivation for selling such risky investments to moderate investors is likely the result of the excessive commissions that were paid the brokers for such sales – commissions much higher than would be paid for the sale of suitable investments.
The Massachusetts Securities Division has information about one independent stock brokerage firm’s sales practices in connection with GPB sales, coming in the wake of GPB’s announcement that GPB has temporarily stopped bringing in new funds. It has also suspended redemptions while it concentrates on accounting and financial reporting.
In addition, there is an issue with the failure to file financials. Such a failure should have been discovered by any brokerage firm selling the investments and should have been a red flag of the extreme risk in the recommendation of the investments. Two private GBP investments that are required because of their size to file financial statements with the Securities and Exchange Commission failed to meet filing deadlines.
These matters have led to a sweep by regulators of 63 broker-dealers that sell GPB, with the regulators requesting data on the extent of sales activity in Massachusetts, disclosure and marketing documents that the firms provide to investors on the solicitations and data on investor suitability.
“While my Securities Division’s investigation is in the very nascent stages, recent activity within GPB raises red flags of potential problems. These red flags, coupled with the fact that sales of private placements by independent broker-dealers have been an ongoing source of investor harm, have led to this investigation,” Galvin, the lead regulator, stated.
Galvin goes on to state, “I must also express my serious concerns regarding the expected proposal by the SEC to expand who can participate in private securities offerings. Without a strong fiduciary rule to prevent sales practice abuses, it is utter folly not to know that main street investors will be hurt.”