Articles Posted in GPB Capital

Broker-Dealer Ordered to Pay Customers More Than $625K in Restitution

The Financial Industry Regulatory Authority (FINRA) sanctioned National Securities Corporation for about $9M, including $4.77M disgorgement in net profits. The broker-dealer allegedly tried to artificially impact the market for GPB private placements involving several public offerings while serving as the underwriter. GPB Capital Holdings is accused of operating a more than $1.7B Ponzi scam that defrauded over 17,000 investors. 

National Securities must pay over $625K in restitution for allegedly not disclosing certain material information to customers who bought GPB private placements. FINRA fined the firm $3.6M for alleged broker misconduct and other violations. 

Regulator Seeks To Protect Nearly $1B of Investor Assets From Founder Accused of Over $1.8B Ponzi Scam.

The US Securities and Exchange Commission (SEC) and court-appointed monitor Joseph Gardemal recommend the appointment of receivership to protect almost $1B of investors’ assets from GPB Capital Holdings owner and founder David Gentile. 

Other executives and founders of the alternative asset firm are accused of operating a more than $1.7B Ponzi scam. That defrauded over 17,000 investors, including many retail investors and retirees. 

FINRA Accuses Broker-Dealers of Negligence and Unsuitability 

The Financial Industry Regulatory Authority (FINRA) recently fined three brokerage firms for negligently selling GPB Capital Holdings private placements to retail customers. The broker-dealers are Dempsey Lord Smith, BD4RIA, and Geneos Wealth Management. 

They have agreed to pay a $70K fine plus more than $30K restitution (with interest), a $45K fine along with $40K restitution, and $400K, respectively. The self-regulatory organizations’ (SRO’s) case against Geneos is also over its sales of the LJM Preservation & Growth Fund to customers.

In Focus Reports submitted to the US Securities and Exchange Commission (SEC) in February 2022, four brokerage firms from the Advisor Group network disclosed that they were respondents in 58 Financial Industry Regulatory Authority (FINRA) arbitration cases. These arbitration cases, from July 2019 through the end of 2021, were over GPB-related losses.

GPB Capital Holdings, LLC, which issued these private placements, is accused of operating an over $1.8B Ponzi scam that defrauded more than 17,000 thousand investors. GPB investors typically purchased these high-commission products in $50K to $100K tranches. They have since suffered substantial investment losses. 

Distributions of GPB private placements were stopped in 2018. Ponzi fraud allegations, resulting investigations, and litigation followed. The GPB funds plunged in value. Meanwhile, dozens of brokerage firms marketed and sold these alternative investments to customers, earning many millions of dollars in commissions and fees.

Former MSC-BD Broker Robert Fehrman Made Unsuitable GPB Private Placement Recommendations 

A Financial Industry Regulatory Authority (FINRA) arbitration panel has awarded a widow $221K in compensatory damages, legal fees, and costs against brokerage firm MSC-BD, LLC over losses she sustained in GPB private placements. GPB Capital Holdings is accused of running a more than $1.8B Ponzi scam that defrauded over 17,000 investors, including many seniors and retail clients. 

MSC-BD is a broker-dealer owned by Austin, Texas-based investment banking firm Madison Street Capital. The widow’s ex-broker, Robert Malone Fehrman, is no longer with the firm. At least one other customer accuses him of selling investments in the GPB Funds. 

US Government Reaches Out to GPB Capital Investors Who Were Harmed 

On December 23, 2021, the US Department of Justice sent a letter to those who have been identified as victims or potential victims of GPB Capital Holdings, LLC‘s more than $1.8B Ponzi scheme. 

The notice comes in the wake of the federal government’s criminal case against GPB founder and owner David Gentile, ex-GPB managing partner Jeffrey Lash, and Ascendant Capital CEO Jeffry Schneider. These individuals were are all charged with securities fraud, wire fraud, and conspiracy related to the alleged Ponzi scheme.

Founder Faces Charges Over $1.8B Ponzi Scam and Wants GPB Capital to Pay His Legal Fees

Beleaguered private equity firm GPB Capital Holdings is back in the news. This time its founder and former CEO, David Gentile, is suing the company in Delaware Chancery Court. 

Gentile, who is facing criminal, civil fraud, and conspiracy charges related to the over $1.8B Ponzi scam that GPB is accused of perpetuating, wants his legal defense fees paid for and not out of his own pocket.

GPB Private Placements Were Sold Through Brokerage Firm’s AdvisorDirect® Service

An investor recently filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against broker-dealer TD Ameritrade over losses sustained in GPB investments. The private placements from GPB Capital Holdings were recommended by an investment advisor via the TD Ameritrade AdvisorDirect® Referral Program. 

GPB Capital Holdings LLC is accused of operating an over $1.7B Ponzi scam that defrauded over 17,000 investors. The claimant is seeking $500K in damages. 

Beleaguered Alternative Asset Firm Also Reaches $30M Settlement With Former Prime CEO 

New York-based GPB Capital Holdings, LLC has finalized its sale of its Prime Automotive Group to Group 1 Automotive. The purchase includes all of Prime Auto’s assets, including over two dozen car dealerships and three collision centers. 

The $880M sale of Prime Automotive Group was announced in September 2021. This comes months after a regulatory filing in May 2021 when GPB Capital stated that it doubted the former’s survival. In August 2021, the alternative asset firm spoke about selling dealerships to generate operational liquidity. 

Couple’s FINRA Arbitration Claim Seeks Up to $500K in Damages

A retired couple from Payson, Utah have filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against Woodbury Financial Services over losses they sustained while investing in GPB Capital Holdings LLC, CIM REIT, and other privately traded entities. Now, they are seeking up to $500K in damages.

Our investment fraud lawyers are representing these investors in their FINRA arbitration claim against Woodbury. This is one of many securities cases we have filed against the broker-dealers that enriched themselves in the alleged $1.7B Ponzi scheme. The hearing will take place in Salt Lake City, Utah.

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