Francis was registered with MML Investors Services, LLC in Ft Lauderdale, Florida from 2008 to 2017, when he was terminated regarding, “Terminated in connection with an investigation into an undisclosed outside business activity, potential selling away and an unauthorized non-securities life insurance transaction.”
In March 2019, Francis was barred by the Securities and Exchange Commission (SEC) after Francis pled guilty to one count of wire fraud. According to the SEC, “Francis was sentenced to a prison term of 41 months followed by three years of supervised release and was ordered to pay restitution in the amount of $422,387.18. In connection with that plea, Francis admitted that between June 25, 2012 and May 31, 2017, he knowingly devised a scheme to defraud at least eleven investors out of approximately $665,190. Francis solicited his MML clients, with whom he attended church, to invest in Mahum, Inc., which Francis incorporated and controlled. Francis falsely represented that Mahum was affiliated with MML and that investments in Mahum would generate high rates of return. Francis misappropriated the funds he received, spending them on cocaine, alcohol, strip clubs, and luxury items. When investors inquired or complained about the status of their investments, Francis would obtain loans and use other investment funds to repay the investors to prevent them from reporting Francis’s activity to MML or to law enforcement.”
GPB Capital Holdings is a New York-based investment firm that offers exempt, private-placement securities that inherently have a high degree of risk due to their nature as unregistered securities offerings (and without regulatory oversight). The firm manages the following nine private placements:
- GPB Automotive Portfolio, LP
- GPB Cold Storage LP
- GPB Holdings, LP
- GPB Holdings II, LP
- GPB Holdings III, LP
- GPB Holdings Qualified, LP
- GPB NYC Development, LP
- GPB Waste Management Fund, LP
The investment firm raised $1.8 billion from investors through private placements that invested in automotive dealerships, the waste management industry, and middle market lending. These investments were high risk and high commission (nearly 8%) private placements.
The Securities and Exchange Commission (SEC) and FINRA are investigating GPB Capital Holdings and the accuracy of disclosures made to investors, performance of funds, and the distribution of capital to investors.
In February 2019, the FBI and officials from the New York City Business Integrity Commission entered the firm’s Manhattan offices.
In September 2018, Massachusetts Secretary of the Commonwealth William Galvin announced an investigation into 63 broker-dealer firms that sold private placements from GPB.
In November 2018, Crowe LLP, the firm’s auditor, resigned.
According to public records, in August 2018, GPB Capital Holdings ceased raising capital from investors. GPB Capital Holdings missed sending the SEC financial reports on April 30, 2018 and is now straightening out the accounting for two of its larger funds – GPB Holdings II and GPB Automotive Portfolio. It is reported that GPB Capital Holdings raised $600-$800 million from 4,000 investors through independent brokerage firms, and claims to have raised $1.5 billion in total.
GPB Capital Holdings was launched in 2013 with a focus on buying auto dealerships. According to the SEC, GPB Automotive Portfolio raised $622.1 million from wealthy investors since 2013, and the minimum investment in GPB Automotive Portfolio was $100,000. GPB Holdings II raised $645.8 million since 2015. GPB Holdings II and GPB Automotive Portfolio together have paid brokers $100.1 million in commissions at a rate of 7.9%.
It is alleged that brokerage firms that sold GPB Capital Holdings and their brokers who recommended GPB Capital Holdings to their clients may not have conducted appropriate due diligence on the funds.
Francis has been the subject of five customer complaints between 2017 and 2018, according to his CRD:
- December 2018. “In 2016, the customer believed that he was investing in a MassMutual product, which was later discovered to be a fraudulent investment, in which Mr. Francis misappropriated client funds.” The customer is seeking $24,000 in damages in this pending customer complaint.
- November 2018. “In 2016, the customer believed that he was investing in a MassMutual product, which was later discovered to be a fraudulent investment, in which Mr. Francis misappropriated client funds.” The customer sought $59,360 in damages and the case was settled for $59,540.95.
- August 2017. ”In 2016, the customer believed that he was investing in a MassMutual product, which was later determined to be an unapproved investment.” The customer sought $20,000 in damages and the case was settled for $20,370.
- August 2017. “In 2016, the customer believed that he was investing in a MassMutual product, which was later determined to be an unapproved investment.” The case was settled for $44,321.
- May 2017. “In 2016, the customer believed that he was investing in a MassMutual product, which was later determined to be an unapproved investment.” The case was settled for $243,652.52.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Royal Alliance Associates, Inc. may be liable for investment or other losses suffered by Packman’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.