GPB Capital Holdings Faces Another Fraud Lawsuit
Already the subject of mass fraud accusations, including allegations of a $1.8B Ponzi scam, the alternative assets firm is once again the defendant of two new lawsuits.
Adding to a growing list of GPB Capital lawsuits is another class action securities fraud case. The other, brought by Volkswagen of America, is accusing GPB of breaking its agreement when it fired Prime Automotive Group CEO, David Rosenberg, last year.
GPB Holdings invests in waste management and auto dealerships. Thousands of investors purchased private placements belonging to the firm’s several GPB Funds. Many of these investors have since filed investor fraud claims for their losses. These claims were filed against the brokerage firms and the brokers that made over $160M in commissions from selling these securities. No one knows how much these funds are still worth – if anything at all.
Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) is pursuing a number of GPB investor fraud claims on behalf of many of those investors.
Proposed Class Action Includes Investors Across The GPB Funds
This latest class action securities fraud lawsuit against GPB was brought by The Shareholders Foundation and filed in Texas. Other defendants in the case are underwriters in Ascendant Capital and brokerage firms allegedly connected to certain false and misleading statements.
The proposed class-action includes investors who purchased interests in the following between June 6th, 2013 and October 25th, 2019:
- GPB Holdings I, II, and III Funds
- GPB Holdings Qualified
- GPB Automotive Portfolio
- GPB NYC Development
- GPB Cold Storage
- GPB Waste Management
The securities fraud lawsuit makes a number of allegations including misrepresentations and omissions, materially misleading statements and conflicts of interest. The plaintiff is accusing the broker defendants, the auditors of the Funds, and the fund administrator of enabling the scam.
It was just in November that GPB Capital was sued in another class action securities fraud case brought in Texas, this one by lead plaintiff and investor, Millicent Barasch. The lawsuit also named GPB executives, the GPB Funds, Ascendant Capital as well as other individuals and entities as defendants. Barasch accused all of them of running a complex scam involving multiple parties who profited from the fraud.
Previous to that, the first class-action lawsuit against GPB Holdings was filed in August. It was brought on behalf of the investors of the GPB Automotive Portfolio Fund and GPB Holdings II Fund.
Volkswagen Calls For GPB Capital To Divest From Auto Dealerships
In the lawsuit by Volkswagen, the care manufacturer wants the alternative asset firm to divest from three dealerships after its ousting of David Rosenberg, who is also suing GPB.
He is claiming wrongful termination and that the reason he was let go was that he went to the US Securities and Exchange Commission (SEC) expressing concerns that the company was engaging in financial misconduct. Rosenberg also is accusing GPB Holdings of operating a Ponzi scheme.
GPB remains the subject of probes by the Federal Bureau of Investigation (FBI), the Financial Industry Regulatory Authority (FINRA), the US Securities and Exchange Commission, state regulators and others. It hasn’t been able to provide anyone with audited financial statements for the past couple of years.
Recently, the alternative asset firm announced to investors of its Automotive Portfolio fund that it wouldn’t be able to provide them with key tax documents that they need by April 15th. Last year, now former GPB Chief Compliance Officer, Michael Cohn, was charged with obstruction of justice.
Investor Fraud Claims
At SSEK Law Firm, we are going after the brokerage firms whose brokers sold our clients their GPB investments, placing commissions over investors’ best interests. We have found that filing your own individual claim rather than opting to join a class action increases your chances of maximizing your financial recovery.
Most recently, we’ve brought GPB investor fraud claims against Arkadios Capital, Kalos Capital, Ameriprise and International Assets Advisory.
If you invested in a GPB fund, contact our investment fraud attorneys at SSEK Law Firm today so that we can help you explore your legal options.