MSC-BD Ordered to Pay Widow $221K Over GPB Private Placement Losses

Former MSC-BD Broker Robert Fehrman Made Unsuitable GPB Private Placement Recommendations 

A Financial Industry Regulatory Authority (FINRA) arbitration panel has awarded a widow $221K in compensatory damages, legal fees, and costs against brokerage firm MSC-BD, LLC over losses she sustained in GPB private placements. GPB Capital Holdings is accused of running a more than $1.8B Ponzi scam that defrauded over 17,000 investors, including many seniors and retail clients. 

MSC-BD is a broker-dealer owned by Austin, Texas-based investment banking firm Madison Street Capital. The widow’s ex-broker, Robert Malone Fehrman, is no longer with the firm. At least one other customer accuses him of selling investments in the GPB Funds. 

Our seasoned securities attorneys represent investors against the brokerage firms that earned commissions from selling these alternative investments. Contact us today at Shepherd Smith Edwards and Kantas (SSEK Law Firm at

Widow Was Inexperienced Investor Who Placed Tens of Thousands of Dollars in GPB Auto

The claimant and her late husband invested over $74,000 from a fixed annuity and her IRA in the GPB Automotive Portfolio, LP. They were not accredited investors; the only type of investor that should invest in alternative investments like the GPB private placements. 

This senior investor contends that while Fehrman was her MSC-BD financial advisor, he recommended that she and her husband take out money from their fixed annuity on two occasions to invest in the GPB Funds. Doing so cost them a 10% surrender fee each time. 

In her FINRA arbitration claim, the widow accused the broker-dealer of negligence, fraud, breach of contract, and other violations. The FINRA arbitration panel unanimously chose to award her $160K in compensatory damages, $53K in legal fees, and $8K in costs. 

Fehrman Named in Other Customer Disputes

According to his BrokerCheck record, Robert Fehrman worked 47 years in the industry until January 2022, when he left MSC-BD. Out of the 11 disclosures listed, four of them are customer disputes, including: 

  • July 2021: A pending GPB private placement case in which the investor requests $115K in damages.
  • September 2020: This was the GPB investor claim brought by the widow, who was recently awarded over $221K.
  • September 2010: This claimant alleged failure to supervise related to Fehrman and an oil and gas partnership. The investor case was settled for $30K.
  • December 1989: This failure to supervise case was concluded with a nearly $338K settlement.

Other broker-dealers where Robert Fehrman used to be registered include:

  • Richfield Orion International
  • WFG Investments
  • Pro-Integrity Securities
  • Sunpoint Securities
  • Charlotte S. Cohen & Co.
  • Texas Capital Securities
  • Advest, Inc.
  • Westport Financial Group
  • Prudential Bache-Securities
  • Dean Witter Reynolds,
  • Merrill Lynch, Pierce, Fenner & Smith.

Skilled GPB Private Placement Lawyers

Unfortunately, many investors have suffered considerable losses in the GPB Funds. SSEK Law Firm continues to go after the broker-dealers that unsuitably sold these private placements to investors. Our FINRA arbitration attorneys can help you explore your legal options. Call us at (800) 259-9010 today for your free case consultation.

Contact Information