GPB Capital Holdings Losses with Former National Securities Corporation Broker Michael Fasciglione?

Posted on Friday, September 6th, 2019 at 9:56 am    

GPB Capital Holdings

Former National Securities Corporation broker Michael Fasciglione (CRD# 1806486) is accused of recommending unsuitable GPB Capital Holdings investments.

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 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.

In July 2019, it was reported that one of GPB Capital Holdings’ David Rosenberg, a former business partner and chief executive of Prime Automotive Group, filed a case against the firm, alleging serious financial misconduct. The report alleged that GPB Capital Holdings tried to push Rosenberg out after he complained to the Securities and Exchange Commission (SEC).

It is alleged that Rosenberg accused GPB Capital Holdings of running a Ponzi-like scheme, in which it used money from investors to prop up the performance of auto dealerships it owns, as well as to finance payments to other investors, according to an article in the Boston Globe.

As of July 2019, GPB Capital Holdings is more than a year past its deadline to make public its audited financial statements for two of its largest funds. In June 2019, GPB Capital Holdings reported losses in the value of two of its investment funds: GPB Holdings II and GPB Automotive Portfolio. GPB Holdings II saw a decline in value of 25.4% and GPB Automotive Portfolio have decreased by 39%. GPB Holdings II and GPB Automotive Portfolio make up the majority of GPB Capital Holdings’ portfolio, raising $1.27 billion from investors.

GPB Capital Holdings manages the following nine private placements:

GPB Capital Holdings other funds also reported declines in estimated value of 25% to 73%.

In January 2015, FINRA suspended Fasciglione for one month and sanctioned him to $5,000 in civil and administrative penalties and fines, regarding, “without admitting or denying the findings, Fasciglione consented to the sanctions and to the entry of findings that he failed to timely amend his form u4 to disclose one internal revenue service (IRS) tax lien filed against him.”

In July 2004, the New York Stock Exchange Division of Enforcement barred Fasciglione for two months regarding, “**07/28/2004** stipulation executed findings: consent to findings that Fasciglione: 1. Violated exchange rule 342.16 by failing to discharge his duties and obligations in connection with the supervision and control of the activities of an employee related to the business of his employer; 2. Violated exchange rule 405(2) by failing to discharge his duties and obligations in connection with the supervision of accounts serviced by a registered representative under his control; 3. Caused violations of exchange rule 410(a) in that he failed to ensure that account designation changes to orders in two customer accounts were authorized by a duly qualified individual who was personally informed of the essential facts relative thereto; 4. Violated exchange rule 352(c), in that he caused reimbursement of losses in two customer accounts; and 5. Caused a violation of exchange rule 351(d) in that he failed to notify his member firm employer of the complaint of a customer of his member firm employer. Penalty: censure, two month plenary bar, and an undertaking to retake qualifying exams before undertaking any securities supervisory position in the future.”

Fasciglione has been registered with Aegis Capital Corp. in Bayside, New York since 2017. Previously, Fasciglione was registered with National Securities Corporation in Mineola, New York from 2007 to 2017.

Fasciglione has been the subject of 13 customer complaints between 1995 and 2018, one of which was closed without action, according to his CRD report. Recent cases are regarding:

December 2018. “Time frame: unspecified. Suitability and breach of fiduciary duty.” The customer is seeking $467,000 in damages and the case is currently pending. The case was regarding real estate securities.

November 2018. “Suitability.” The customer is seeking $12,703 in damages and the case is currently pending. The case was regarding real estate securities.

March 2018. “Misrepresentation.” The customer is seeking $15,000 in damages and the case is was settled. The case was regarding real estate securities.

May 2017. “Unsuitability, breach of fiduciary duty, negligence.” The customer is seeking $432,020.69 in damages and the case was settled for $135,000. The case was regarding alternative investments.

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, National Securities Corporation may be liable for investment or other losses suffered by Fasciglione’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.