Regulator Seeks To Protect Nearly $1B of Investor Assets From Founder Accused of Over $1.8B Ponzi Scam.
The US Securities and Exchange Commission (SEC) and court-appointed monitor Joseph Gardemal recommend the appointment of receivership to protect almost $1B of investors’ assets from GPB Capital Holdings owner and founder David Gentile.
Other executives and founders of the alternative asset firm are accused of operating a more than $1.7B Ponzi scam. That defrauded over 17,000 investors, including many retail investors and retirees.
Gardemal believes that Gentile an attempt to implement changes has been made, which would grant him faster access to the company’s funds to cover more of his expenses. Such as tax liabilities. As a defendant in the alleged Ponzi scam, the company has paid about $2.7M for Gentile’s legal costs in the SEC and criminal cases.
Gentile has reportedly attempted to appoint three people as senior managers. Allegedly, to regain control of GPB. Although all accusations were denied.
The Commission brought a civil lawsuit against GPB, Gentile, and two other GPB executives in February 2021. Several state regulators have also brought their litigation. Meanwhile, the US Justice Department filed its criminal charges.
Dozens of broker-dealers earned high commissions from selling private placements in the GPB Funds to customers. Many should have never gotten involved in these risky, illiquid products.
Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) GPB investment lawyers represent many investors in their Financial Industry Regulatory Authority (FINRA) arbitration claims against the broker-dealers that unsuitably sold these investments to clients.
With decades of experience, our investment attorneys help explore your legal options related to your GPB Fund losses, contact Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) today.
SSEK Law Firm Partner and GPB Investment Attorney Kirk Smith:
SEC Wants GPB Monitor Joseph Gardemal To Take on Receiver Role
The SEC recommends Gardemal, named monitor of GPB, in February 2021. That oversees the private equity firm since then, be appointed the receiver. In a court filing, Gardemal noted that naming a receiver would lower the financial costs from a management arrangement that Gentile had established before he resigned as CEO in 2021.
Further elaborating that a receivership would make it possible to dismiss the independent board. That overlooks the GPB Management while consolidating specific roles. This would allow the company to save money. The current Gardemal mentioned that the board costs $835K and GPB expenses $7M a quarter on operating and management costs.
GPB Investors Still Awaiting Returns on Their Investments
After selling $1.2B in GPB Capital Holdings assets, including several car dealerships. The company now has over $920M in cash plus around $60M in escrow accounts. The Wall Street Journal quoted Gardemal in context to the significant amount of that money that is “available for distribution” today.
Fut mentioned that a receivership would allow for the acceleration of investor distributions. He contends that without the presence of receivership. The investors might have to wait years to get back the money they invested in the GPB Funds.
Seasoned GPB Private Placement Investment Attorneys
GPB Capital investors have been receiving disappointing news after news with their investments for several years. GPB Capital Holdings now has over $1B available to pay investors who are still waiting to recover their losses is problematic.
As one of the first investment attorney firms to file a GPB case, our experts recommend taking action. Relying on possible restitution and reimbursement is not the only option. This is why it is crucial that you have your own GPB investment attorneys representing you and going after the broker-dealer that sold you these private placements.
If you have been affected by the latest GPB Capital news or have suffered investment losses, you are eligible for free case consultation with investment attorneys at SSEK.
To schedule your free, no-obligation case consultation, contact our GPB private placement fraud law firm today to work with an investment attorney or call SSEK Law Firm at (800)-259-9010.