Once Again, GPB Capital Holdings Reneges On Giving Key Tax Documents to Investors
K-1 Tax Documents Delayed Past Tax Deadline
In the latest GPB Capital news, the firm has notified investors of its GP Holdings II, LP fund that they won’t be getting their 2019 Schedule K-1 tax documents ahead of or by July 15, 2020, which is when US tax filings are due this year. The filing deadline was extended by the Internal Revenue Service (IRS) from its usual April 15 date as part of the US government’s COVID-19 relief.
This is the latest delay by the alternative asset firm, which has yet to provide key financial statements to investors and regulators for the past few years and is accused of operating a more than $1.5 B Ponzi scam.
The failure to provide audited financial statements, necessary tax documents, and other key information about the GPB funds to investors is doing nothing to assuage these concerns, which have already led to broker fraud claims against dozens of brokerage firms to recover their losses.
Our GPB investor fraud lawyers are pursuing a number of these Financial Industry Regulatory Authority (FINRA) arbitration cases for our clients against the broker-dealers whose registered representatives sold these private placements to them. Contact Shepherd Smith Edwards and Kantas (SSEK Law Firm) today.
GPB Fund Investors Left Hanging About Their Investments’ Worth
In a July 2 letter, GPB Capital Holding told investors of its largest fund of this new delay and said that it was committed to providing them with a final schedule ahead of the extended filing deadline of September 15, 2020. Whether this will actually happen remains to be seen.
In January, at least 6,353 investors of the GPB Automotive Portfolio, LP, which is GPB’s second-largest fund, that they wouldn’t be getting their K-1 documents in time for the original April 15 tax deadline.
This is the fund that raised $622.1M from investors while paying $52.2M in commissions to the broker-dealers and their brokers that sold its private placements. At that time, GPB said it hoped to provide investors with their K-1 forms by the end of July.
Why Are K-1 Tax Documents So Important For GPB Private Placement Investors?
Schedule K-1 tax forms are key in that they let investors know how much they’ve made or lost during the reporting period and what their private placements are worth. K-1 tax forms are supposed to be issued yearly to limited partnership owners who are required to submit them with their taxes.
Broker-dealers have now earned over $160M from the steep commissions that came from selling GPB private placements to investors, who have no idea if their investments are still worth anything at all, saw their redemptions suspended in 2018, and have no way to access their funds.
Meanwhile, GPB Capital Holdings remains under investigation by the US Securities and Exchange Commission (SEC), FINRA, state regulators, the Federal Bureau of Investigation (FBI), and others. It is also subject to a number of class action securities fraud lawsuits, other litigation by former business partners also alleging fraud, and accusations of operating not just your run-of-the-mill Ponzi scam, but a more complex type of scheme with multiple co-conspirators involved.
GPB Fund Fraud Attorneys Helping Investors Recover Their Losses
SSEK Law Firm continues to offer free case consultations to GPB investors looking to recover their losses. Unfortunately, GPB private placements were unsuitable for many of the customers to whom they were sold. Not only that, but broker-dealers neglected to do their proper due diligence to make sure that these were viable investments before recommending the GPB funds, and they should be held liable for customers’ losses.
If you have been affected by the latest GPB Capital news or have suffered investment losses as a result of investing in this firm’s private placements, contact our GPB private placement fraud law firm today.