A Texas investor has filed an investor fraud claim against Kalos Capital, Inc. and its financial advisor Joshua Daniel Stivers, who operated under the name Platinum Wealth Advisory. The retired investor claims that Stivers promised her an investment plan that was low risk and conservative. Instead, the Kalos Capital advisor allegedly employed an unsuitable employment strategy that was improperly allocated and involved investing in private placements, including the GPB Holdings II, LP Fund.
The investor contends that this has resulted in substantial losses for her. Now, she is seeking up to $500K, with interest, plus costs.
GPB Private Placements Funds
GBP Capital Holdings is an alternative asset manager that invests in waste management and car dealerships. The private placement issuer is under investigation by the Financial Industry Regulatory Authority (FINRA), the US Securities and Exchange Commission (SEC), the Federal Bureau of Investigation (FBI), and New Jersey and Massachusetts regulators, with the latter, Secretary of the Commonwealth William Galvin, investigating more than six dozen brokerage firms that sold GPB private placements to investors.
Broker-dealers and their representatives have reportedly made more than $165M in commissions from the GPB sales. Unfortunately, the value of the different funds have collectively dropped from $1.8B to around $1.27B, which means investors have lost a lot of money.
Not only that, but all of the GPB funds have suspended issuing returns to investors since last year. Also, GPB has not been able to provide the proper and required disclosures to regulators over the past couple of years. All of this has spurred many GPB investors to pursue broker-dealer misconduct cases and broker fraud claims seeking to recover their losses.
Investor’s Portfolio Was Over-concentrated
According to this latest investor fraud claim, Stivers solicited prospective clients and targeted retirees. He then proceeded to over-concentrate their portfolios in private placements. The claimant contends that despite the fact that she is an inexperienced investor who wasn’t looking to take on much risk, The Kalos Capital advisor placed over 50% of her portfolio in two private placements, including a $100K position in GPB Capital.
Private placements are risky investments, very illiquid, and not suitable for unsophisticated investors and/or those who are not looking to or are unable to handle a lot of risk or volatility in the marketplace. Private placements are so high risk that they are not recommended for conservative investors, even if they qualify for them as accredited investors.
However, private placements tend to pay high commissions to brokers, advisers, and their firms. This can be added incentive for recommending them to clients even if private placements are unsuitable for them and/or not in line with their investment goals.
The claimant said that because her GPB investment is illiquid, she has not been able to leave it. While she was able to get out of a second private placement that Stiver’s allegedly recommended to her, the exit process was very difficult and reportedly cost her thousands of dollars.
The claimant is accusing Kalos Capital and Stivers of the following:
- Unsuitable recommendations
- Gross lack of supervision
- Failures of due diligence
Investors are not the only ones accusing GPB Capital Holdings of fraud. Even the alternative asset manager’s own business partners are claiming wrongdoing. For instance, ex- former partner Patrick Dibre and current partner Prime Automotive Group CEO David Rosenberg are suing the issuer in separate lawsuits. Both of them claim that the company has been run like a Ponzi scam.
GPB Private Placement Lawyers
Please contact Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) if you suffered losses from investing in a GPB private placement fund that was recommended to you through Kalos Capital, by Stiver, or through another brokerage firm and/or financial adviser. Contact SSEK Law Firm to request your free, no obligation case consultation.