GPB Capital Holdings Allegedly Sold by More than 80 Brokerage Firms Across the Country
Posted on Tuesday, April 23rd, 2019 at 3:49 pm
Financial advisors across the country from more than 80 brokerage firms are alleged to recommend unsuitable investments in GPB Capital Holdings.
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. Brokerage firms that are alleged to recommend GPB Holdings include:
- Accelerated Capital Group
- Advisory Group Equity Services, Ltd
- Aegis Capital Corp
- Aeon Capital, Inc.
- American Capital Partners, LLC
- Arete Wealth Management, LLC
- Arkadios Capital
- Ascendant Alternative Strategies, LLC
- Ausdal Financial Partners, Inc.
- Avere Financial Group, LLC
- Axiom Capital Management, Inc.
- BCG Securities, Inc.
- Benjamin & Jerold Brokerage I, LLC
- Cabot Lodge Securities, LLC
- Calton & Associates, Inc.
- Cape Securities, Inc.
- Capital Financial Services, Inc.
- Capital Investment Group, Inc.
- Cascade Financial Management, Inc.
- Center Street Securities, Inc.
- Coastal Equities, Inc.
- Colorado Financial Service Corp.
- Concorde Investment Services, LLC
- Crown Capital Securities, L.P.
- Crystal Bay Securities, Inc.
- David A. Noyes & Company
- Dawson James Securities, Inc.
- Dempsey Lord Smith, LLC
- Detalus Securities, LLC
- DFPG Investments, Inc.
- Dinosaur Financial Group, LLC
- Emerson Equity LLC
- Financial West Group
- FSC Securities Corp.
- Geneos Wealth Management, Inc.
- Great Point Capital, LLC
- H. Hill Securities, LLLP
- Hightower Securities, LLC
- IBN Financial Services, Inc.
- Innovation Partners LLC
- International Assets Advisory, LLC
- Investment Architects, Inc.
- Kalos Capital, Inc.
- Kingsbury Capital, Inc.
- Ladenburg Thalman
- Landolt Securities, Inc.
- Lewis Financial Group, L.C.
- Lion Street Financial, LLC
- Lowell & Company, Inc.
- Madison Avenue Securities, Inc.
- McDonald Partners LLC
- McNally Financial Services Corp.
- Moloney Securities Co., Inc.
- Money Concepts Capital Corp.
- MSC – BD LLC
- National Securities Corp.
- Newbridge Securities
- Newbridge Securities Corp.
- Orchard Securities, LLC
- Pariter Securities, LLC
- Partier Securities, LLC
- Private Client Services, LLC
- Purshe Kaplan Sterling Investments
- Royal Alliance Associates, Inc.
- Sagepoint Financial, Inc.
- Sandlapper Securities, LLC
- SCF Securities, Inc.
- Sentinus Securities, LLC
- Silber Bennett Financial, Inc.
- Stephen A. Kohn & Associates, Ltd.
- Triad Advisors, LLC
- Uhlmann Price Securities, LLC
- United Planners’ Financial Services of America, LP
- Vanderbilt Securities, LLC
- Vestech Securities, Inc.
- Western International Securities, Inc.
- Westpark Capital, Inc.
- Whitehall-Parker Securities, Inc.
- Wilmington Capital Securities, LLC
- Windsor Street Capital, LP
- Woodbury Financial Services, Inc.
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.
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, brokerage firms around the country may be liable for investment or other losses suffered by its 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.