Current Investigations

Northstar Financial Services (Bermuda) to Liquidate After Extension Request Denied

Published on: April 15, 2021 | by Shepherd Smith Edwards & Kantas, LLP

Investors Can Still Pursue Damages from Bankoh, Truist, and Ocean Financial Services

The Bermuda Supreme Court has turned down a request by Northstar Financial Services (Bermuda) Ltd.’s management asking for more time to pursue restructuring. Northstar had filed for Chapter 15 bankruptcy last year.

The Court’s ruling means that the company will be liquidated, with the proceeds going to creditors. Specifically, what this means for Northstar Financial Services (Bermuda) investors is that the Bermuda Supreme Court must approve such payments before they can be issued to them.

Geneos Wealth Management Named in $1M GPB Investor Fraud Claim

Published on: March 30, 2021 | by Shepherd Smith Edwards & Kantas, LLP

Brokerage-Dealer Accused of Unsuitable Investment Recommendation In Three GPB Funds

Geneos Wealth Management, a Denver, Colorado-based brokerage firm, is accused of inappropriately recommending that a customer invest in three GPB Capital funds: The GPB Holdings II LP, the GPB Automotive Portfolio, and GPB Waste Management. The investment fraud claim contends that the broker-dealer invited GPB Capital Holdings employees to give a presentation in order to get investors on board.

GPB Capital Holdings, a New York-based alternative assets firm, is now accused of operating a more than $1.8 billion Ponzi scam that enriched not just the company’s executives but also the dozens of brokerage firms and their registered representatives. These firms failed to carry out the proper due diligence when they unsuitably recommended and sold GPB private placements to customers.

SSEK Law Firm Investigates Brokerage Firms That Sold New York City REIT to Customers

Published on: March 25, 2021 | by Shepherd Smith Edwards & Kantas, LLP

Investors That Bought NYC Stock When it Was a Non-Traded REIT Hit Especially Hard After NYSE Listing

Our real estate investment fraud attorneys (REIT) at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) are investigating the broker-dealers and investment advisors that sold New York City REIT (NYC) to customers.

Now available on the New York Stock Exchange (NYSE) and open to any investor with a brokerage account, this real estate investment trust used to be a non-traded REIT and it is the investors that purchased this non-traded real estate trust that have sustained the most significant losses after it went public in August 2020.

Ex-Ocean Financial Services Broker Maria Calcena Named In Customer’s Northstar Financial Services (Bermuda) Fraud Claim

Published on: March 24, 2021 | by Shepherd Smith Edwards & Kantas, LLP

Former Customer of Florida Broker is Seeking $245K In Damages

Maria Florencia Calcena, currently an Infinex Investments broker in Palm Beach, Florida, is named in a $245K investor claim in which the customer invested in a product from Northstar Financial Services (Bermuda) Ltd.

The investor is alleging breach of fiduciary duty, negligence, and violation of Florida’s Investor Protection Act during Calcena’s time as an Ocean Financial Services registered representative.

GPB Capital Notifies Investors of Independent Monitor But Denies Ponzi Fraud Allegations

Published on: March 9, 2021 | by Shepherd Smith Edwards & Kantas, LLP

SEC Requested Monitor to Protect GPB Fund Investors

In a letter dated March 3rd, 2021, to all investors of its limited partnerships, CFO and interim CEO of GPB Capital Holdings, Rob Chmiel, notified investors that the firm has consented to a court-appointed independent monitor by the SEC to run the company and oversee its assets.

The regulator said it wanted to protect GPB Fund investors from further financial harm in the wake of the Ponzi fraud charges.

Ex-David Lerner Associates Broker Charles Bonilla Suspended For Alleged Unsuitable Energy Investment Recommendations

Published on: February 25, 2021 | by Shepherd Smith Edwards & Kantas, LLP

Former David Lerner Associate Broker May Have Sold Spirit of America Energy Fund Among Others to Customers

The Financial Industry Regulatory Authority (FINRA) has suspended Florida-based broker, Charles Bonilla, for six months. The action comes over allegations that he unsuitably recommended two energy investments to customers while he was a David Lerner Associates stockbroker without having enough knowledge about them.

Bonilla agreed to the FINRA suspension. He will pay both a $5K penalty and more than $22,400 in disgorgement plus interest. However, he is not denying or admitting to the self-regulatory organization’s (SRO’s) findings.

SEC Seeks Court-Appointed Monitor To Protect Investors Victimized In Mass GPB Capital Ponzi Scam

Published on: February 12, 2021 | by Shepherd Smith Edwards & Kantas, LLP

Regulator Wants to Prevent Alternative Asset Firm From Causing Investors More Financial Harm

In U.S. District Court for the Eastern District of New York in Brooklyn, the Securities and Exchange Commission (SEC) has submitted a court filing asking that a monitor be appointed to prevent GPB Capital Holdings, LLC from committing more alleged misconduct and disposing of any assets that could be used to recover investors’ money. The regulator is suing the alternative asset firm for allegedly defrauding more than 17,000 investors in an over $1.7B Ponzi scam.

The SEC contends that having a monitor is warranted and needed. The Commission wants to give this person broad powers over “non-privileged books, records, and account statements for the entities and assets” related to GPB Capital Holdings’ portfolio companies and funds.

SEC Says GPB Capital Holdings CEO and Executives Defrauded Over 17,000 Investors In $1.7B Ponzi Scam

Published on: February 5, 2021 | by Shepherd Smith Edwards & Kantas, LLP

Justice Department Files Parallel Criminal Charges Against GPB Capital’s David Gentile and Others

The Securities and Exchange Commission (SEC) has filed civil charges against GPB Capital Holdings CEO and owner David Gentile, ex-GPB managing partner Jeffrey Lash, Ascendant Capital owner Jeffry Schneider, and affiliated entities, including Ascendant Alternative Strategies, of defrauding 17,000 retail investors in a more than $1.7B in a Ponzi-like scam.

GPB Capital Holdings, an alternative asset firm that invests in auto dealerships and waste management, has been under investigation over Ponzi fraud allegations by the SEC, the Federal Bureau of Investigation (FBI), the Financial Industry Regulatory Authority (FINRA), and others for more than two years. Now, in a parallel case, the U.S. Attorney’s Office for the Eastern District of New York has filed criminal charges indicting Gentile, Lash, and Schneider. If convicted, they could each spend up to two decades in prison.

Ex- CEO’s Lawsuit Against GPB Capital Holdings’ Prime Automotive Group May Proceed

Published on: February 4, 2021 | by Shepherd Smith Edwards & Kantas, LLP

Ex-Prime Automotive Group CEO Accused Alternative Asset Firm of Running Massive Ponzi Scam

A Massachusetts Superior Court judge says the majority of the lawsuit filed by former Prime Automotive Group CEO, David Rosenberg, can move forward. Rosenberg, in his complaint, claims that he was fired and retaliated against after he accused the parent company, GPB Capital Holdings, of financial misconduct.

The alternative asset firm is under investigation over allegations that it ran an over $1.5B Ponzi scam that defrauded thousands of investors. Its many GPB funds have dropped significantly in value and investor redemptions were suspended more than two years ago.

GME, AMC, BB and Other High Flying Stock Losses

Published on: January 29, 2021 | by Shepherd Smith Edwards & Kantas, LLP

Retail Investors Make Stock Market History

The week of January 25, 2021, saw a remarkable market event where retail investors bid up the price of a handful of stocks in an attempt to force a “short-squeeze” on major Wall Street hedge funds. When an investor “shorts” a stock, which is a bet the stock is going to go down in price, the investor borrows the shares and then sells them at the existing price. If the share price goes down, the investors will “cover” the short by buying at the lower price to return the borrowed shares, capturing the difference between what the investor sold the shares at and the cost to buy the shares back in order to return them. Conversely, if the stock price goes up, the investor has to buy the shares at a high price than what the investor received when they were sold in order to return the borrowed share and loses the difference on the short play.

When shorting a stock, since the investor does not own the stock, the investor’s position is done on margin, that is, using credit from the brokerage firm. As the value of the stock increases, the margin balance increases. In such a situation, an investor can receive a “margin call”, where the brokerage firm forces the investor to close the position. In a margin call from a short position, that means forcing the investor to buy the stock, regardless of the price, which is when there is this short-squeeze.