GPB Capital Holdings: Takes Millions in Loans from the Fed

GPB Capital – Update on Investigation, July 22, 2020

The White Law Group continues to investigate potential securities fraud claims involving broker dealers who may have unsuitably recommended GPB Capital offerings to investors.

According to Investment News today, GPB Capital has received between $3 million to $7 million in federal forgivable loans through the Paycheck Protection Program. 

GPB Capital Holdings reportedly received from $1 million to $2 million in PPP loans, and businesses named GPB 5 and GPB 8 got the same amount, according to Investment News, citing information from the Department of the Treasury’s website. Another entity, GPB Cars 12, reportedly received a loan of $350,000 to $1 million.

The Federal program was established to help businesses pay their employees during the pandemic and it is unclear if any of the funds will go to GPB investors, according to the article.

GPB Capital has been struggling with bad press since 2018 when William Galvin and the Massachusetts Securities Division first  launched an investigation into the “sale practices” of 63 Broker Dealers who were selling the GPB capital private placements which led to a halt in sales and suspension of distributions.

There have been numerous lawsuits filed against GPB since then, alleging serious  financial misconduct and accusations of an alleged Ponzi scheme.

The firm has reportedly raised $1.5 billion in investor equity through various private placement offerings in the automotive retail and waste management sectors. Although one of its funds made a special distribution earlier this year, the firm has not paid any other distributions since 2018. 

Update July 22, 2020 – GPB Capital Reports $200 million Decline in Assets Under Management

According to Investment News this week, new filings with the SEC indicate that GPB Capital reported $238.6 million in regulatory assets under management (AUM) as of June 2019. The firm reported an AUM of $434.3 million at the end of 2017, according to the Form ADV, indicating a decline of 45.2% in 18 months.

GPB Shareholders may have Claims

The White Law Group is currently representing numerous investors in claims against their brokerage firms in connections with their investments in risky GPB Capital offerings, including the following:

Armada Waste Management LP (f/k/a GPB Waste Management LP)

GPB Holdings II

GPB Holdings I

GPB Automotive Portfolio

GPB Cold Storage

GPB NYC Development

GPB Holdings Qualified LP

GPB Holdings Automotive LLC

GPB Portfolio Automotive LLC

Private Placement investments such as GPB offerings are highly complex, high risk investments. They are only suitable for sophisticated, accredited investors and institutions.

Unfortunately brokers may not always adequately explain the risks and liquidity problems involved with purchasing units in a limited partnership or limited liability company. These investments are often considerably more risky than traditional investments such as stocks, bonds, or mutual funds just because of lessor oversight by regulators. They also typically come  with high fees and commissions.

Broker dealers are required to perform adequate due diligence on all investment recommendations they make. They must ensure that each investment is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.

If a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be liable for investment losses through FINRA arbitration.

Filing a Complaint against your Brokerage Firm

If you have suffered losses investing in a GPB Capital offerings you may be able to file a complaint against your brokerage firm. Please call the securities attorneys at The White Law Group for a free consultation at 1-888-637-5510.

These claims are distinct from the class action filed directly against GPB Capital and could be pursued concurrently.

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 Franklin, Tennessee.  For more information on the firm and its representation of investors, visit https://whitesecuritieslaw.com.