GPB Capital Fraud Case Against Arete Wealth Management Results In $515K Arbitration Award

Claimants Had Alleged Negligence, Poor Supervision, and Other Charges 

A Financial Industry Regulatory Authority (FINRA) arbitration panel has awarded one customer and his trust $515K in their GPB private placement fraud claim against Arete Wealth Management. The Chicago-based brokerage firm also has been ordered to pay all of the claimant’s legal fees. The award is more than twice what was sought by the claimants, who had requested $225K in damages. 

This is just one of the thousands of broker-dealer negligence claims brought against the financial firms and their registered representatives that marketed and sold GPB investments to their customers. GPB Capital Holdings, which invests primarily in waste management and auto dealerships, has allegedly been running an over $1.5B Ponzi scam. 

Meanwhile, investors have seen the different GPB funds plunge in value and their redemptions suspended. They also have been unable to verify through audited financial statements or regulatory filings the current value of their investments, which, at this point, may be worthless.

Over 60 broker-dealers and their brokers have collectively earned more than $160M  in commissions from GPB private placements sales. Many of them are now the subject of broker fraud claims from customers seeking to recover their losses and other damages. 

Our FINRA arbitration and investment fraud attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm at have been hard at work pursuing a number of these firms on behalf of our customers. Contact us at (800) 259-9010 so that we can help you explore your legal options.

Arete Wealth Management Accused of Due Diligence Failures

According to InvestmentNews, this award against Arete Wealth Management may be the first significant victory in FINRA arbitration against a broker-dealer over GPB investment losses. The claimants had primarily accused Arete Wealth Management of failing to perform its due diligence obligation.

GPB Capital Holdings has been under scrutiny since 2018. First, after it missed its deadline with the US Securities and Exchange Commission (SEC) to submit financial statements for two of its larger funds, GPB Holdings II and GPB Automotive Portfolio. 

Then, later that year when the alternative asset firm suspended investor redemptions. It has since become the subject of a number of class action securities fraud lawsuits, as well as litigation by former company executives. All of them are accusing GPB of running a massive, complex Ponzi scam.

In 2019, the Federal Bureau of Investigation (FBI) raided GPB Capital Holdings’ offices in New York. The Bureau, along with SEC, FINRA, and other regulators, are continuing to with their investigations. 

Experienced GPB Private Placement Fraud Lawyers 

Brokerage firms had a duty to conduct the proper due diligence to make sure the GPB funds were legitimate, safe investments for their customers. They also have the obligation to only recommend financial products that are suitable for each investor. 

Yet, many of those that purchased these risky private placements including retail clients and retirees, should have never been sold alternative investments, to begin with. 

Even with the restrictions placed on all of us because of COVID-19, SSEK Law Firm remains hard at work pursuing financial recovery for investors who lost money from investing in the GPB Funds. Contact us today to request your free, no-obligation case consultation with one of our seasoned GPB investor fraud attorneys.

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