NorthStar Financial Services (Bermuda)Learn More Here. Se Habla Español.

New York And Other States Sue GPB Capital Holdings For Mass Ponzi Scam

State Lawsuits Come After SEC Complaint and FBI Arrests

New York Attorney General Letitia James is suing GPB Capital Holdings along with five co-defendants for running a mass Ponzi scam.

The NY AG contends that the alternative asset firm and private equity fund manager, which is based in the state, defrauded investors throughout the US of over $700M. The complaint said that more than 1,400 of those victims were New Yorkers who invested over $150M.

Her state’s securities fraud lawsuit comes on the heels of the US Securities and Exchange Commission’s (SEC) civil case accusing the same defendants—GPB Capital Holdings, its CEO and owner David Gentile, ex-GPB managing partner, Jeffrey Lash, GPB private placement agent and Ascendant Capital owner, Jeffry Schneider, Ascendant Capital, and Ascendant Capital Alternative Strategies—of defrauding over 17,000 investors from whom they raised more than $1.7B in a Ponzi-like scheme. On Thursday, the Federal Bureau of Investigation (FBI) arrested Gentile, Lash, and Schneider on criminal fraud charges.

New York is not the only state suing over the alleged GPB Ponzi scam. Illinois, Alabama, Georgia, New Jersey, Missouri, and South Carolina have also filed their securities fraud lawsuits. More state cases may be coming.

Our GPB Private placement fraud lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) have been actively pursuing Financial Industry Regulatory Authority (FINRA) arbitration claims against the dozens of brokerage firms that collectively made over $160M from marketing and selling investments in the GPB funds to their customers.

Contact SSEK Law Firm today in New York at (716) 261-3529 or elsewhere in the US at (800) 259-9010.

GPB Fraud Lawsuit Alleges Misappropriation, Misrepresentations, Omissions, and Concealment

New York Attorney General James filed the complaint in New York County Supreme Court. The state contends that the defendants knew there were issues with the GPB Funds’ cash flow but that they continued to fraudulently tell investors that distributions were fully from the operations of its portfolio companies when, allegedly, they were in part coming from other investors’ money.

Investors that purchased GPB Capital private placements had been lured by promises of making 8% yearly returns on their investments. Instead, redemptions and distributions from the GPB Funds have been suspended for over two years.

Meanwhile, investors have not been able to access their money nor do they know if the private placements they bought are still worth anything.

New York’s securities fraud case is accusing the defendants of seeking to hide their scam with falsified financial records and back-dated performance guarantees. The defendants allegedly did not disclose certain conflicts of interest. The state is claiming the misappropriation of funds, including millions of dollars to subsidize the lavish lifestyles of Gentile, Lash, and Schneider.

Seeking restitution and disgorgement for the investors that were harmed, NY Attorney General James is charging the defendants with violations of New York Executive Law § 63(12) and the Martin Act. The NY GPB fraud lawsuit wants permanent injunctions, other equitable relief, and the costs and fees incurred by the state.

Experienced New York GPB Investment Fraud Attorneys

Unfortunately, thousands of investors, including many retail investors, unsophisticated investors, and retirees, have suffered significant losses in GPB Capital Holdings investments. SSEK Law Firm has filed numerous investor fraud cases against a number of broker-dealers, including Kalos Capital, Arkadios Capital, Money Concepts Capital, Ameriprise (AMP), and others to recover damages on our clients’ behalf.

Contact our GPB Capital Holdings fraud lawyers today and request your free, no-obligation case consultation.

Contact Information