Secretary Galvin Brings Charges against GPB Capital for Defrauding Massachusetts Investors

GPB Capital Holdings Update

Secretary Galvin, Massachusetts’ top securities regulator, reportedly filed an administrative complaint against GPB Capital Holdings on May 28 that accuses the firm of issuing marketing materials with misstatements and omissions to more than 180 Massachusetts investors.

Massachusetts securities division alleges that GPB misled Massachusetts residents, who invested more than $14 million to five funds, about the sources of their monthly payouts. The complaint also alleges that the New York firm did not adequately disclose its ties with Ascendant Capital, a broker-dealer that pitched GPB funds to other brokers and retail investors.

Securities regulators in Massachusetts are seeking fines, disgorgement of profits and a permanent ban on the New York firm from doing business in the state, according to an administrative complaint filed Wednesday. The claim will go before a state hearing officer for adjudication.

GPB Capital Holdings, Inc. has reportedly raised $1.5 billion in investor equity through various private placement offerings in the automotive retail and waste management sectors.

The firm 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.

Recovery of Investment Losses

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.

Free Consultation

If you have suffered losses investing in a GPB Capital Holdings offering at the advice of your financial advisor, the securities attorneys at The White Law Group may be able to help you. Please call the offices 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 http://whitesecuritieslaw.com.