According to a recent article in InvestmentNews, the already troubled GPB Capital Holdings private placement told investors in a letter dated January 23, 2020, that they will not be able to provide Schedule K-1 tax documents to their approximately 6,350 investors, or limited partners, by at least April 15th in one of its largest funds, GPB Automotive Portfolio.
The Schedule K-1 tax form is issued annually to owners of limited partnerships. The Schedule K-1 tax form tells the investors what they made or lost during the reporting period. The K-1 also informs the investors what the private placement is worth and investors are required to file the Schedule K-1 form for their private placement investments. An extension can be filed on the taxes if a Schedule K-1 is not delivered.
InvestmentNews writes that according to the Securities and Exchange Commission (SEC), GPB Automotive was one of the company’s two largest funds, raising 622.1 million and paying $52.2 million in commissions to brokers who sold the product.
GPB Automotive is one of a series of GPB private placements. According to the InvestmentNews article, GPB has raised $1.5 billion. Broker/dealers sold the securities to wealthy clients in chunks of $50,000 to $100,000. GPB has a history of not providing investors with timely information.
According to the letter sent to investors in GPB Automotive, GPB said they are hoping to issue the forms by the end of July. The letter stated, “Based on this information, we encourage our limited partners to reach out to their own tax professionals for guidance.”
Investors in GPB Automotive don’t know the value of the fund, or their investment. GPB Capital is being investigated by the FBI and the SEC. They have failed to produce audited financial statements for the funds.
If you’ve suffered losses in the high-risk private placement GPB Automotive due to the recommendation of your broker/dealer, contact Soreide Law Group and speak to an experienced securities lawyer at no cost regarding the possible recovery of your investment losses through a FINRA arbitration at: 888-760-6552.
Soreide Law Group works on a contingency fee and represents our clients nationwide before FINRA.