On February 4, 2021, the SEC filed a complaint against GPB Capital and various related entities and individuals alleging that the defendants had been perpetrating a massive fraudulent scheme using a network of feeder funds.
As explained in the complaint, GPB Capital held itself out to the investing public as an alternative asset management firm which acted as the general partner and fund manager for a number of limited partnership funds, including:
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- Armada Waste Management, LP (fka GPB Waste Management, LP)
- GPB Automotive Income Fund, Ltd.
- GPB Automotive Portfolio, LP
- GPB Cold Storage, LP
- GPB Holdings, LP
- GPB Holdings Qualified, LP
- GPB Holdings II, LP
- GPB Holdings III, LP
- GPB NYC Development, LP
Through the funds, GPB Capital raised in excess of $1.8 billion from approximately 17,000 retail investors nationwide, approximately 4,000 of whom were seniors. At least some of the capital raised by the funds was used to invest in portfolio companies in the retail automotive, waste management, and healthcare sectors. By 2021, however, the assets of GPB Capital and the GPB funds were “far below” what was needed to make investors whole.
Subsequent to filing its complaint, the SEC was successful in getting an independent “monitor” appointed by the court. The monitor is charged with supervising the business activities of GPB Capital to prevent any further fraudulent activity and to maximize the assets available for distribution to investors. The monitor recently filed his sixth quarterly report with the court. It states that investors have yet to receive any distributions, and fails to provide any concrete timeline for distributions.
It is highly unlikely that GPB investors will be made whole from the distributions. However, they may have other avenues of recourse available to them, including legal action against financial advisors who recommended GPB fund investments. Even if the investments had been legitimate, they would not have been suitable for all investors because of the risk profile of the investments. To date, hundreds of arbitration cases have been filed against financial advisers whose recommendations to invest in GPB funds are alleged to have been unsuitable for the claimants involved. Many of the cases have settled or resulted in arbitration awards.
The brokerage firms that are alleged to have sold GPB fund investments include:
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- Accelerated Capital Group
- Advisory Group Equity Services, Ltd
- Aegis Capital Corp
- Aeon Capital, Inc.
- American Capital Partners, LLC
- Arete Wealth Management, LLC
- Arkadios Capital
- Ascendant Alternative Strategies, LLC
- Ausdal Financial Partners, Inc.
- Avere Financial Group, LLC
- Axiom Capital Management, Inc.
- BCG Securities, Inc.
- Benjamin & Jerold Brokerage I, LLC
- Cabot Lodge Securities, LLC
- Calton & Associates, Inc.
- Cape Securities, Inc.
- Capital Financial Services, Inc.
- Capital Investment Group, Inc.
- Cascade Financial Management, Inc.
- Center Street Securities, Inc.
- Coastal Equities, Inc.
- Colorado Financial Service Corp.
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- Concorde Investment Services, LLC
- Crown Capital Securities, L.P.
- Crystal Bay Securities, Inc.
- David A. Noyes & Company
- Dawson James Securities, Inc.
- Dempsey Lord Smith, LLC
- Detalus Securities, LLC
- DFPG Investments, Inc.
- Dinosaur Financial Group, LLC
- Emerson Equity LLC
- Financial West Group
- FSC Securities Corp.
- Geneos Wealth Management, Inc.
- Great Point Capital, LLC
- H. Hill Securities, LLLP
- Hightower Securities, LLC
- IBN Financial Services, Inc.
- Innovation Partners LLC
- International Assets Advisory, LLC
- Investment Architects, Inc.
- Kalos Capital, Inc.
- Kingsbury Capital, Inc.
- Ladenburg Thalman
- Landolt Securities, Inc.
- Lewis Financial Group, L.C.
- Lion Street Financial, LLC
- Lowell & Company, Inc.
- Madison Avenue Securities, Inc.
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- McDonald Partners LLC
- McNally Financial Services Corp.
- Moloney Securities Co., Inc.
- Money Concepts Capital Corp.
- MSC – BD LLC
- National Securities Corp.
- Newbridge Securities
- Newbridge Securities Corp.
- Orchard Securities, LLC
- Pariter Securities, LLC
- Partier Securities, LLC
- Private Client Services, LLC
- Purshe Kaplan Sterling Investments
- Royal Alliance Associates, Inc.
- Sagepoint Financial, Inc.
- Sandlapper Securities, LLC
- SCF Securities, Inc.
- Sentinus Securities, LLC
- Silber Bennett Financial, Inc.
- Stephen A. Kohn & Associates, Ltd.
- Triad Advisors, LLC
- Uhlmann Price Securities, LLC
- United Planners’ Financial Services of America, LP
- Vanderbilt Securities, LLC
- Vestech Securities, Inc.
- Western International Securities, Inc.
- Westpark Capital, Inc.
- Whitehall-Parker Securities, Inc.
- Wilmington Capital Securities, LLC
- Windsor Street Capital, LP
- Woodbury Financial Services, Inc.
Need Assistance?
If you have suffered investment losses as a result of malpractice or misconduct our experienced team of investment fraud attorneys may be able to assist you in recovering some or all of your losses. Call us toll-free at 888-607-4819 for a free consultation or email us through our “Contact” page to schedule a free consultation.
