Articles Posted in Private Placements

Another Kalos Capital Broker Sold GPB Investments To Investors

Once again, our GPB investment lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm) have filed an investor fraud lawsuit against Kalos Capital and one of its brokers, Kristian Finfrock. 

In this latest broker fraud case, the Claimants are a retired couple who contend that Kalos Capital broker and investment advisor, Kristian Finfrock, pushed them into placing $750K of their life savings into alternative investments including non-traded real estate investment trusts (Non-traded REITs), annuity contracts, and GPB Capital private placements. 

Sagepoint Financial Customers Suffer Losses From GPB Funds

If you are an investor who suffered losses after a Sagepoint Financial broker sold you GPB private placements, our investor fraud lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm) would like to talk to you. GPB Capital Holdings is accused of running a $1.8B Ponzi scam. Sagepoint Financial is one of more than 60 broker-dealers whose registered representatives sold these investments to their customers.

Sagepoint Financial is part of Advisor Group, a huge network of independent wealth management firms. In August, the broker-dealer and another Advisor Group firm, Royal Alliance, were prominently named by the lead plaintiffs in the first class action securities case against GPB Capital. The firms’ brokers had sold them their investments in the GPB Automotive Portfolio and the GPB Holdings II funds. The plaintiffs, like so many other investors, had sustained substantive losses in the wake of the Ponzi fraud allegations, the suspension of investor redemption, the massive drop in value of all of the GPB Funds, and the other regulatory and civil troubles plaguing the alternative asset firm.

Kalos Financial Defends Its Sale Of GPB Private Placements 

In a letter issued to investors on November 4th, Kalos Financial President, Larry Lyons, reported that its due diligence team recently met with senior GPB Capital Holdings executives including CEO, David Gentile. 

The brokerage firm is one of dozens of broker-dealers under fire for selling GPB private placements that were issued by the asset management company, which has since been accused of operating a $1.8B Ponzi fraud. 

GPB Capital News: Michael Cohn Facing Obstruction Charges 

The US Department of Justice (DOJ) has filed criminal charges against Michael Cohn, the Chief Compliance Officer and Managing Director of GPB Capital Holdings. Cohn is a former US Securities and Exchange Commission (SEC) examiner. 

The obstruction of justice charge is related to the regulator’s probe into the alternative asset firm, which is accused of operating a $1.5B Ponzi scam. Now, Cohn is accused of stealing information from the Commission before leaving the regulator last October to start his employment at GPB Holdings

GPB Capital Sales: SSEK Files Investor Fraud Lawsuit Against Money Concepts Capital

Two investors in Alabama are pursuing a Financial Industry Regulatory Authority (FINRA) claim against Money Concepts Capital Corp. These investors sustained losses after one of the independent brokerage firm’s longtime registered representatives recommended that they purchase GPB Capital private placements. 

Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) is representing both claimants in their investor fraud claim. 

After more than two years without disclosing any audited financial statements to investors or regulators, GPB Capital Holdings has once again missed the deadline for providing a required update to shareholders. This time, the lapsed due date was one it had set for itself. This is just the latest bad news headline plaguing the beleaguered alternative asset firm, which is accused of running a $1.5B Ponzi scam. It is also facing a slew of investor claims for losses sustained after its GPB private placements funds saw a huge drop in value, in some cases by more than 73%.

Once boasting $1.8B in assets involving auto dealerships and waste management, the private placement issuer is now under investigation by the Federal Bureau of Investigation (FBI), the US Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and multiple state regulators. Two of its former business partners are accusing the company of operating like a Ponzi fraud.

Prime Automotive Group CEO Fired After Suing GPB Capital

A Tennessee investor is pursuing a Financial Industry Regulatory Authority (FINRA) arbitration claim against Kalos Capital, Inc. and its broker Martin Hunter McFarlin for the more than $100K in losses that he sustained from investing in non-traded real estate investment trusts (non-traded REITs) and the GPB Capital Automotive Portfolio. Now, the claimant is alleging omissions, misrepresentations, gross lack of supervision, unsuitable recommendations, and due diligence failures. Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) is representing this individual in his case against Kalos and McFarlin.

Our client is a divorced dad, a small business owner, and an unsophisticated investor, which is why he turned to McFarlin and Kalos several years ago to help him invest his retirement money for him and his family. During seminars and company Christmas parties, the claimant was told that private placements were safe alternative investments.

Private Placements Are Risky Investments

An investor who filed an arbitration claim against Arkadios Capital for selling her GPB Capital Holdings private placements now has a hearing date set before a Financial Industry Regulatory Authority (FINRA) panel: April 20, 2020. This is one of the first GPB investor fraud case brought against a brokerage firm to get a hearing scheduled before one of the self-regulatory authority’s (SRO) arbitrators. Our broker fraud lawyers at Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) are representing this claimant.

The investor, who is a woman from the greater Atlanta, Georgia area, is claiming hundreds of thousands of dollars in retirement fund losses after her financial adviser, an Arkadios broker, recommended the GPB securities to her. While with the broker-dealer, her portfolio became especially concentrated in private placements, including the GPB Holdings II Limited Partnership. Now, the claimant is contending that this GPB investment, in particular, was an extremely unsuitable recommendation for her, especially since it involved her IRA from which no losses can be offset.

Our client maintains that she was not aware of the risks involved in the investment strategy used by her Arkadios broker. She is alleging unsuitable recommendations, omissions, misrepresentations, gross negligence, due diligence failures, breach of fiduciary duty, negligence, and inadequate supervision. The investor is seeking damages, interest, and costs.

Two broker-dealers, Sagepoint Financial and Royal Alliance, recently made headlines after investors who bought GPB Capital Holdings private placements from them sued the alternative asset firm in a class action securities fraud case. GPB Capital Holdings, which invests in waste management and car dealerships, is accused of operating a $1.8B Ponzi scam.

The lead plaintiffs of the first class action securities lawsuit are Karen Loch of Georgia and Victor Wade of Texas. They invested in two GPB funds–$50K in GPB Holdings II for Wade that he purchased through Sagepoint Financial and $75K in GPB Automotive Portfolio for Lock through Royal Alliance Associates.

GPB Holdings II and GPB Automotive are GPB’s two largest funds, with both having  raised over $600M from over 6000 investors. The two funds are not listed or traded on any exchange. In May, InvestmentNews reported that their assets were over $10M and they had at least 750 shareholders, thus requiring them to be registered with the US Securities and Exchange Commission (SEC). Still, GPB failed to register both funds by their April 30, 2018 deadline and no annual reports have been filed since. This failure has kept Lock, Wade, and thousands of other investors from receiving even the most basic information about both funds and their money.

The first class action securities case against GPB Capital Holdings has been filed. The alternative asset management firm, which invests in waste auto management companies and car dealerships, is accused of operating a $1.8B dollar Ponzi scam that caused thousands of investors to suffer major losses. Now, investors of two of its funds are demanding that GPB fulfill its duty to provide yearly audited statements. GPB has not issued these statements since 2017.

The lead plaintiffs in the case, Victor Wade of Texas and Karen Loch of Georgia, both bought into the GPB funds as limited partnerships. Wade invested $50K in GPB Holdings II through Sagepoint Financial. Loch invested $75K in GPB Automotive via Royal Alliance Associates. Both brokerage firms are Advisor Group, Inc. subsidiaries.

Loch and Wade are suing on behalf of investors of the GPB Holdings II fund and the GPB Automotive Portfolio Fund. They have named the two funds, GPB Capital Holdings, its CEO David Gentile, COO Roger Anscher, CFO William Jacoby, and a number of Doe parties as the defendants.

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