GPB Capital has been roiled with controversy, investigations by federal and state agencies, and legal troubles since 2018. GPB has been raided by the FBI, subject to a FINRA investigation, and is facing multiple lawsuits. GPB has ceased to sell new investments and investors have not received distributions. The firm has been plagued with accounting and auditing issues which have led to the resignation of several auditors and accountants.
Founder and CEO David Gentile is currently facing criminal, civil, and conspiracy charges in the $1.8 billion Ponzi-like scheme that he and others are accused of perpetuating. Gentile and two other executives are alleged to have altered records in order to make it appear as though the GPB funds were performing well, even though they were hemorrhaging losses. They also allegedly misled investors about the sources of money used to pay distributions, falsely claiming that the distributions came from investment returns, when in reality, a large portion of those distributions were paid with investor capital.
GPB’s problems with the regulators started in 2018 when it failed to file audited financial statements for two of its largest funds, a red flag for brokers and financial advisors. The company has missed many deadlines for those reports and now, more than a year later, has no firm date on when those documents will be filed.
In 2021, GPB’s offices were raided by the FBI, and several members of its leadership resigned in a wave of scandal and embezzlement claims. The FBI, the SEC, and the New York City business integrity commission reportedly visited the company’s offices and collected documents. A receiver has now been appointed to take control of the firm and determine how assets should be distributed to investors.
Investors who purchased private placement securities issued by GPB Capital Holdings, the GPB Capital Investment Trust, and Armada Waste Management LP are facing significant losses as a result of those investments. These securities are considered private placements, meaning that they were sold to investors outside the registered exchanges. As a result, they are often very high-risk and require sophisticated investors who understand their risks. Brokerage firms often charge hefty commissions to sell these types of investments, which can add up quickly and lead to large losses.
Investors who lost money invested in GPB should consult with a Securities Law Firm immediately. The securities lawyers at Peiffer Wolf Carr & Kane are reviewing the sales practices and due diligence of the FINRA broker-dealers who sold these high-risk GPB funds to investors. Investors may be able to recover compensation for their losses through a FINRA arbitration claim. Contact us today to learn more about your options.