PB Capital Holdings Fraud?
Soreide Law Group is investigating possible claims against brokers who may have recommended and sold investors GPB Capital Holdings funds. Evidently, the company operates out of New York as an alternative asset management firm that aims to acquire private income-producing companies. Notably, it has $1.5 billion dollars in capital and more than 160 portfolio companies. Apparently, GPB Capital Holdings focuses on automotive retail, technology enabled services, debt strategies, and waste management. Apparently, the company has been entangled in lawsuits as of late which is a cause for investor concerns. Funds in question:
- GPB Automotive Portfolio, LP
- GPB Cold Storage, LP
- GPB Eurobond Finance PLC
- GPB Holdings II, LP
- GPB Holdings III, LP
- GPB Holdings Qualified, LP
- GPB Holdings, LP
- GPB NYC Development, LP
- GPB Scientific, LLC
- GPB Waste Management, LP formerly: GPB Waste Management Fund, LP
GPB Losses Caused By Ponzi Scheme According To Lawsuit Brought By Former Operating Partner
According to a lawsuit involving GPP Capital Holdings, the firm reportedly provided $42,000,000.00 to a former operating partner and owner of multiple New York based automobile companies, Patrick Dibre. Notably, the company contends that Patrick Dibre failed to deliver the dealerships.
However, Patrick Dibre had plenty to say about GPB. Specifically, Patrick Dibre brought a counterclaim, alleging that the company’s losses stemmed from a manipulative and complicated Ponzi scheme. Not only that, but Patrick Dibre claimed that GPB Capital Holdings made big payments to investors based on erroneous financial data. Also, GPB used an alternative, undisclosed investment strategy to produce the dividends for investors, according to Patrick Dibre. Further, Dibre claims that the company falsified financial statements to conceal its fraudulent activities.
Both FINRA and SEC launched investigations into GPB Capital Holdings. GPB Capital Link
GPP Declares Cuts To Dividends On Two Funds
In addition, investors are concerned about GPB Capital Holdings cutting dividends. For example, the general partner of the company apparently decreased distributions on two funds in 2018. When the company notified investors about the cuts to dividends, it apparently provided no information about when it would resume regulator distributions.
Supposedly, nine private placements have been filed by GPB Capital Holdings with SEC, including GPB Holdings II and GPB Automotive Portfolio. SEC reports show two private placement portfolios contain more than six thousand investors each, and have generated more than a billion dollars in capital. Apparently, brokers selling GPB Capital Holdings funds have earned more than $100M. Evidently, brokers received large commissions for selling the investments.
Brokers And Advisors May Have Inappropriately Sold GPB Capital Holdings
Investors should be concerned about brokers selling private placements. Mainly, brokers sell “Reg D” private placements, which are high risk products, to institutions and accredited investors seeking high yields. However, they are not for everyone, especially conservative and unsophisticated investors. Also, brokers sometimes sell these products to investors because of the high commission structures attached to them.
Brokers are obligated to ensure that the private placements they recommend are suitable. Furthermore, brokers have to conduct reasonable due diligence on private placements to ensure they are not fraudulent. Given the allegations against GPB Capital Holdings, it is possible that brokers may have engaged in irresponsible and unlawful sales practices by recommending and selling those investments.
Experienced losses by investing in GPB Capital Holdings funds because of your broker or adviser? If you have, contact Soreide Law Group at (888) 760-6552 and speak with experienced counsel about a possible recovery of your investment losses. Soreide Law Group represent clients on a contingency fee basis and advances all costs. The firm has recovered millions of dollars for investors who have suffered losses due to misconduct of brokers and brokerage firms.