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.
Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) has filed a number of Financial Industry Regulatory Authority (FINRA) arbitration claims on behalf of GPB investors seeking to recover their losses and we are continuing to go after these firms and their brokers.
If you suffered losses in GPB Funds that were recommended to you by a Geneos Wealth Management broker or any other financial advisor, call our Denver investment fraud attorneys at (720) 439-2827. Elsewhere in the US, call (800) 259-9010 today.
Many Broker-Dealers Neglected To Conduct Due Diligence When Marketing GPB Private Placements
GPB Capital Holdings and key executives, including founder and ex-CEO David Gentile, are now the subject of both a Securities and Exchange Commission (SEC) fraud lawsuit and a criminal fraud case.
A court has appointed an outside independent monitor to oversee GPB operations and protect the interests of the over 17,000 investors that were defrauded even as more than 60 brokerage firms made over $160M in commissions from selling GPB private placements to them.
These firms and their registered representatives earned up to 8% in commissions, with 7% going to the brokers and 1% to the firms.
While these firms clearly didn’t do enough research to make sure that the GPB private placements were indeed legitimate alternative investments that were safe for customers, there are those that reportedly went further in a bid to get investors to buy.
According to a recent InvestmentNews article, there are brokers and financial advisors that used some of the “worst tactics” to market GPB investments to their customers who were promised monthly distributions. Instead, investors stopped getting redemptions a while ago and have likely lost their entire investments in the GPB funds.
Brokers Used Deceitful Tactics to Legitimize GPB Capital Investments to Investors
The article reports that there were brokers who claimed that there were ties between GPB Capital Holdings and Merrill Lynch in order to lure investors, with one registered representative who purportedly said that the latter was a lead underwriter.
Merrill Lynch, which issued a report on the auto business in 2015, told InvestmentNews that it is not aware of any such connection. GPB Capital Holdings invests mostly in auto dealerships and waste management.
The article also writes about how one firm promoted events, including dinners and private suites at Madison Square Garden, that were affiliated with Ascendant Capital, the brokerage firm and lead wholesaler of GPB investments. (Ascendant and its owner Jeffry Schneider, are also defendants in the SEC fraud lawsuit, with Schneider also a defendant in the criminal fraud case.)
After one such “exclusive” event on December 16, 2014, invitees and up to four guests were invited to attend a game between the Dallas Mavericks and the New York Knicks. Such tactics only served to further legitimize GPB Capital and its investments.
Recoup Your GPB Capital Investment Losses
Please contact our GPB investor fraud attorneys at SSEK Law Firm today so that we can help you explore your legal options. Our securities law firm continues to offer free case consultations to GPB investors. Unfortunately, these investments were unsuitable for the portfolios of many investors across the United States.
If you have suffered losses as a result of working with a Geneos Wealth Management broker or any other financial advisor, get in touch with our team of experienced attorneys and receive your free case consultation. Contact us online or by calling (800) 259-9010.