Allegations from a Massachusetts Court Room: GPB Capital Operating a Ponzi-Like SchemeWednesday, July 31, 2019
If you invested in GPB Capital or hold GPB Private Placements, I encourage you to contact an investor rights attorney, soon. Specifically, I invite you to contact the attorneys at ChapmanAlbin. If you’ve been following the Investors Watchdog for awhile, you already know that our firm has been investigating the GPB Capital situation for many months. We are prosecuting loss claims on behalf of a number of GPB investors. We are the right attorneys for you to talk to about your GPB investment. Talk with an experienced and knowledgeable ChapmanAlbin attorney without cost or obligation.
Since 2013, GPB Capital Holdings has raised $1.8 billion—that billion, with a ‘b’ from investors. GPB explained that it would use the investors’ money to buy auto dealerships and waste management businesses, and related purposes. These businesses, it predicted, would return single digit (7%, 8%?) returns for investors. GPB turned to about sixty independent broker-dealer firms to raise the money from their customers. It reportedly paid the brokers 7-8% sales commissions (a very substantial financial incentive!) to bring home the bacon. Prominent among the broker-dealer firms raising investor capital for GPB were the ‘Advisor Group’ brokerage firms:
- Royal Alliance Associates Inc.,
- Sagepoint Financial Inc.,
- FSC Securities Corp., and
- Woodbury Financial Services Inc.
We’ve been writing about GPB on these pages for a year or two now, and our firm’s attorneys are getting busy with GPB investors cases. Last week, there was an interesting new development out of lawsuit filed in Massachusetts state court. In court papers, the CEO of Prime Automotive Group claimed that GPB Capital Holdings has been operating a Ponzi scheme of sorts. He claims that instead of using incoming investor money to operate and expand the business, GPB Capital Holdings is using investor money to make the auto dealerships appear profitable when they are not, and to finance pay-outs to other investors. I hasten to add that these are allegations, only, and GPB Capital Holdings denies that they are true.
What we know is true: GPB is more than a year past its deadline to make public its audited financial statements for two of its largest funds. In June, it reported to its investors that the value of its funds had declined, some dramatically. GPB has also disclosed that it is being investigated by a number of regulators.