Investors who purchased private placement funds from GPB Capital paid high commissions to brokers and have suffered significant losses. GPB is facing multiple investigations by the SEC, FBI, and state agencies.
GPB describes itself as an “alternative asset management company focusing on acquiring income-producing private companies.” It offers funds in several industries, including the automotive retail sector, which is the source of GPB’s two most troubled funds – GPB Automotive Portfolio and GPB Holding II. Attracted by promises of high income and pushed by broker-dealers receiving substantial commissions, investors put $1.3 billion into them between 2013-2018.
Unfortunately for investors, serious problems began, and continue to, pile up:
- April 2018 – GPB failed to produce required SEC financial statements, leaving brokers and investors in the dark for months
- June 2018 – SEC subpoenas GPB for information.
- August 2018 – GPB suspended the raising of new investor capital
- Nov 2018 – GPB’s auditors resigned amid claims of unacceptable “perceived risks”
- February 2019 – FBI raided GPB office
- July 2019 – Former GPB partner accuses them of “massive securities fraud” and misappropriation of investor money.
- Additional allegations state that the funds were sold through a series of false and misleading statements, and that – for some investors – the advisers and broker-dealers that sold the funds were motivated by high commissions to recommend them inappropriately.
While evidence and allegations of serious misconduct continue to pile up, investors have suffered losses and industry-high fees:
- In June 2019, GPB estimated that the value of its combined seven funds was down to 61% of it’s $1.8 billion initially raised capital.
- One of those funds – Armada Waste Management – suffered as much as a 67.4% decline in value.
- The two largest funds – GPB Holdings and GPB Automotive Portfolio – have declined 25.4% and 39% respectively, by GPB’s own admission, and may actually be worth less than that.
- 9.3% of client money was paid in fees and commissions, meaning clients paid a lot for the experience of losing significant amounts of their principal. 
While investigations move forward, GPB continues to delay releasing accurate, audited financial statements and investors are left hanging, wondering if their money still exists and where.
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.