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Shepherd Smith Edwards and Kantas Files Investor Fraud Lawsuit Against Money Concepts Capital for GPB Capital Sales

GPB Capital Sales: SSEK Files Investor Fraud Lawsuit Against Money Concepts Capital

Two investors in Alabama are pursuing a Financial Industry Regulatory Authority (FINRA) claim against Money Concepts Capital Corp. These investors sustained losses after one of the independent brokerage firm’s longtime registered representatives recommended that they purchase GPB Capital private placements. 

Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) is representing both claimants in their investor fraud claim. 

GPB Capital Holdings is now accused of running a $1.8B Ponzi scam and investors who’ve gotten involved in one of its GBP private placement funds have, in some cases, experienced losses of more than 70% after the funds dropped in value. Meanwhile, investor redemptions were suspended almost a year ago. 

Ongoing investigations by the US Securities and Exchange Commission (SEC), FINRA, the Federal Bureau of Investigation, and state regulators have not helped GPB’s claim that there has been no wrongdoing, nor has lawsuits brought by two of the alternative asset firm’s former business partners accusing it of investor fraud.

GPB Capital Holdings invests in waste management and auto dealerships. Recently, the firm notified shareholders of two of its biggest funds, the GPB Automotive Portfolio, LP,  and the GPB Holdings II, LP, that once again, it would not be able to provide audited disclosures as promised.

Money Concepts Capital Advisor Recommended Home Equity Loan for GPB Investing

In this latest GPB private placement lawsuit, the Money Concepts Capital adviser was a close friend of the claimants, who are conservative retail investors. 

They contend that the firm and its financial representative encouraged them to borrow money to purchase GPB investments, in particular with the GPB Automotive Portfolio fund. 

This involved taking out a six-figure home equity loan even though FINRA tells members to never recommend that clients utilize equity from a home to purchase securities. An earlier Investor Alert from the self-regulatory organization (SRO) even states that in nearly every instance, it would be unsuitable to recommend the use of home equity to invest. 

Now, the two investors are claiming over $100K in losses and alleging the following:

  • Omissions
  • Misrepresentations
  • Unsuitable recommendations
  • Gross lack of supervision
  • Failure of due diligence

The claimants say they that they were not aware of the risks involved and were promised an 8% mostly return payment. They also were told to expect to “cash-out” once their investment went public within a few years. And while at first, the claimants did receive check payments every month, it was not enough to cover their home equity loan bill. 

Even as it became clear to the public that GPB Capital was in big trouble, the claimants continued to receive monthly statements showing that their GPB private placement investment wasn’t losing value. 

The investors now believe that these were not just misstatements, but also false information. It wasn’t until June that they received a financial statement showing an $80K loss. SSEK Law Firm believes that considering that this is an “unaudited statement of value” by GPB, this financial statement may be false too and the losses could be even greater. 

GPB Ponzi Scam

Also, the claimants have received information from GPB noting that what they thought were returns or profits that they received were actually investor distributions, either their own or from other investors. Payments made to investors using other investor funds are usually a sign of a Ponzi scam.  

While the two claimants continue to have to pay their home equity bill each month and deal with the loss of their money,  Money Concepts Capital and its broker have earned their big commissions from the GPS private placement sales. 

To date, they, along with the other brokers and broker-dealers that recommended these funds to their clients, have made over $167M from GPB investments. 

GPB Investor Fraud Lawyers

If you invested in GPB private placements through Money Concepts Capital, Arkadios Capital, Kalos Capital, Royal Alliance, Sagepoint Financial, or any of the more than six dozen brokerage firms that sold these investments to clients, contact SSEK Law Firm today. We represent GPB Capital investors throughout the US in fighting for their financial recovery.

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