Four more Firms Sanctioned for Unsuitable GPB Offerings 

FSC Securities, Royal Alliance, SagePoint and Woodbury Censured & Fined for Unsuitable Sales of GPB Offerings   

According to The Financial Industry Regulatory Authority (FINRA), between May 4, 2018, and June 29, 2018, FSC Securities, Royal Alliance, SagePoint Financial and Woodbury Financial negligently failed to communicate to investors that in an offering that GPB Capital Holdings, LLC failed to timely make required filings with the Securities and Exchange Commission, including filing audited financial statements. According to FINRA, each firm violated FINRA Rule 2010. 

 Last February we reported that the CEO of GPB Capital Holdings, a New York-based registered investment adviser, and two others were arrested in connection with a massive “Ponzi-like scheme” that allegedly defrauded 17,000 investors across the U.S. out of more than $1.7 billion, according to the U.S. Attorney’s Office for the Eastern District of New York.   

According to FINRA, on April 27, 2018, GPB Capital sent a letter to many broker-dealers that sold GPB Capital-offerings. The letters allegedly state that GPB Capital was in the process of registering certain classes of securities issued as limited partnerships with the SEC, including GPB Automotive Portfolio LP. As part of that process, these offerings were required to file audited financial statements. The letters purportedly further stated that the delivery of these audited financial statements would be delayed pending the completion of a forensic audit.     

While representatives at FSC Securities, Royal Alliance, SagePoint Financial and Woodbury Financial received the letter from GPB Capital notifying them of the delays and GPB Capital’s stated intention to complete a forensic audit, the four firms each sold limited partnership interests in GPB Automotive Portfolio after that announcement. FSC Securities made 60 sales with a total principal amount of $4,265,890, earning $298,612 in commissions. Royal Alliance made 32 sales with a total principal amount of $2,450,000, earning $171,500 in commissions. SagePoint Financial made 56 sales with a total principal amount of $4,951,546, earning $343,308 in commissions. Woodbury Financial made 55 sales with a total principal amount of $4,638,928, earning $324,725 in commissions.  

The firms reportedly agreed to the following sanctions: 

FSC Securities:  a censure; a $50,000 fine; and partial restitution of $277,612.30 plus interest  
Royal Alliance: a censure; a $35,000 fine; and partial restitution of $171,500 plus interest
SagePoint Financial:  a censure; a $60,000 fine; and partial restitution of $325,475.66 plus interest
Woodbury Financial:  a censure; a $55,000 fine; and partial restitution of $300,224.98 plus interest  

Recovery of Investment Losses  

The White Law Group has represented numerous investors who suffered financial losses involving GPB Capital. To learn more about the firm’s investigation please see:     

GPB Capital Execs Arrested for Allegations of “Ponzi-like Scheme”    

If you suffered losses investing in GPB Capital due to a recommendation by your broker, the securities attorneys at The White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.     

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. For more information, please visit our website, www.whitesecuritieslaw.com.