Dempsey Lord Smith Censured & Fined for Unsuitable Sales of GPB Capital Offerings
FINRA Reportedly Sanctions Dempsey Lord Smith for GPB Capital Investments
According to The Financial Industry Regulatory Authority (FINRA) on March 21, the regulator has reportedly censured and fined Dempsey Lord Smith LLC $70,000 after the firm allegedly negligently failed to inform four clients about important facts pertaining to GPB Capital offerings. The firm was also ordered to pay $29,840 in restitution.
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, including Dempsey Lord Smith LLC. The letters allegedly state that GPB Capital was in the process of registering certain classes of securities issued as limited partnerships with the SEC. 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.
According to the findings, while the firm learned of the delays, its registered representatives purportedly recommended and sold GPB Capital securities to four customers that were unsuitable in light of the customers’ investment profiles. Despite the announcement, all of these sales were purportedly reviewed and approved by firm principals.
The limited partnership interests sold to investors were reportedly four GPB offerings totaling $323,000 to four investors and received a total of $24,000 in commissions from these four sales. The offerings were:
- GPB Automotive Portfolio, LP which was formed in 2013 to acquire and operate automotive dealerships;
- GPB Cold Storage, LP which was formed in 2015 to acquire and operate cold storage facilities;
- GPB NYC Development, LP which was formed in 2015 to acquire and operate a mixed use residential and commercial rental building; and
- Armada Waste Management, LP, formerly GPB Waste Management, LP which was formed in 2016 to acquire interests in waste management companies.
Potential Lawsuits to Recover Financial 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:
The foregoing information is all publicly available and provided by the White Law Group. If you are concerned about investments with Dempsey Lord Smith LLC, 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.
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