Embattled GPB Capital Holdings has been struck with another legal blow. Investors recently filed a class action complaint that alleges GPB breached its fiduciary duty by failing to produce timely and accurate financial statements and that it continues to prevent investors from getting information about their investments. The lawsuit implicates brokers who sold GPB Capital Holdings, stating that:
- “Defendants sold, or materially assisted with the sale of, these securities through a series of massive improperly unregistered public offerings in which they paid themselves and a network of brokers exorbitant fees and falsely promised investors… prompt investment returns of 8% or more per annum.”
- “Fees paid out of investor funds included up to 11% paid to brokers who sold the securities (an unprecedented amount), and an additional 6% to 9% paid to GPB and its undisclosed affiliates on a regular and continuous basis. GPB also paid itself and its affiliates various other fees.”
How Does This Affect You?
The genius of GPB’s alleged scam was in offering brokers huge incentives in the form of extremely high fees. This influenced brokers to sell the security out of greed, against better judgement, and in spite of their fiduciary duties to investors. The class action lawsuit does not include the brokers who passed on GPB’s scam to you. If your broker sold you this asset, you may have a claim against them for failing to offer you unbiased, accurate advice.
Some of the brokers that sold GPB placements include:
- Woodbury Financial Services, Inc.
- Sagepoint Financial, Inc.
- Royal Alliance Associates, Inc.
- Arete Wealth Management,
- Moloney Securities Co., Inc.
- Triad Advisors LLC
- Titan Securities
- Madison Avenue Securities, LLC
- Detalus Securities, LLC
- Cascade Financial Management, Inc.
- Vestech Securities, Inc.
If you are an investor who purchased a GPB Capital product, contact us to find out if you have a case that could help you recover losses due to securities mismanagement or broker-dealer misconduct.