Investor’s GPB Private Placement Claim Against Arkadios Capital Gets FINRA Hearing
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.
GPB Investor Fraud Claims
Since GPB’s various funds have plunged in value over the past year–some by more than 70– investors have been coming out in droves to file private placement fraud claims seeking to recover their money and losses. The alternative asset firm, which once held $1.8B in assets that were invested primarily in waste management and auto dealerships, has seen its reputation and numerous funds take huge hits.
Federal regulators such as the Financial Industry Regulatory Authority (FINRA) and the US Securities and Exchange Commission (SEC) are investigating GPB, while William Galvin, the head of Massachusetts’ securities division, is investigating dozens of broker-dealers, including Arkadios, for selling GPB private placements to their customers. One former GPB business partner, Patrick Dibre, has accused the alternative asset management firm of operating a Ponzi scam.
Meantime, brokers and their firms have reportedly made more than $167M in commissions from GPB investment sales to their clients. This isn’t a big surprise considering that private placements tend to charge substantial commissions compared to other kinds of investments.
However, private placements are not very liquid investments and they are incredibly risky–not to mention that they are usually unregistered investments. All of this is to say that investing in a GPB fund is not for every investor, and especially not for retail investors and retirees who cannot afford to take on too much risk. GPB private placements are definitely not suitable for retirement accounts.
Our GPB investor fraud attorneys are working with clients throughout the US in fighting to recover their losses sustained from investing in these private placements and their funds:
- GPB Holdings III
- GPB Holdings II
- GPB NYC Development
- GPB Waste Management
- GPB Automotive Portfolio
- GPB Cold Storage
SSEK Law Firm – GPB Lawyers
If you are one of these investors who invested in a GPB fund that was recommended to you by an Arkadios broker or a financial representative from another brokerage firm and you would like to explore your legal options, contact SSEK Law Firm for your free, no obligation case consultation.