Advisor Robert Smith Accused of Selling Fraudulent GPB Capital Investments

shutterstock_168478292-300x222Our firm represents multiple clients who have collectively lost millions in the sale of fraudulent GPB Capital Holdings (GPB Capital) related investments.  Our firm has analyzed the GPB Capital offerings and believe that brokerage firms did not review these offerings in any significant detail.  Any serious due diligence would have revealed that GPB Capital was an investment fraud scheme.

Advisor Robert Smith (Smith), according to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA), has been accused of selling GPB Capital.  Smith is currently registered with member firm Concorde Investment Services, LLC (Concorde Investment).  In addition, Smith disclosed four total customer complaints. If you have been a victim of Smith’s alleged misconduct our firm may be able to assist you in recovering funds.

Our firm’s investigation has found that brokerage firms failed to conduct due diligence and investigate multiple aspects of GPB Capital’s business including its senior management, fantastical business claims, and intra-fund lending practices.  For instance, with respect to GPB Capital’s senior management the company was founded by David Gentile (Gentile).  Had brokerage firms investigated GPB Capital’s senior manager it would have found that prior to founding GPB Capital, Gentile’s experience was as a CPA and company advisor with the accounting practice his family ran at Gentile Pismeny & Brengel, LLP (GP&B) in New York.  Nonetheless, GPB’s PPMs claimed expertise in these areas.   GPB Holdings II, LP, PPM, pg. 9 (Apr. 13, 2015) (“GPB’s senior management have a great deal of experience investing in the Automotive Retail, Managed IT Services and Life Sciences sectors.”).

As a background, financial advisers sold $1.5 billion of these high-risk private placements offered by GPB Capital Holdings.  However, GPB Capital told investors in 2018 that virtually none of the firm’s financial reports could be trusted and that in fact the offering had no accurate financial information.  Recently, GPB Capital released its own internal analysis and valuation of its funds without providing any evidence to support its findings.  In November 2019, GPB Capital alerted investors that the firm had essentially given up on reporting any financial information – basically conceding that it is not possible to account for the firm’s use of investor funds.

Over the past year controversy has embroiled GPB Capital in what seems to be a never ending saga of investigation and accounting delays.  Recently, GPB’s chief compliance officier was indicted for illegally obtaining information on the SEC’s investigation into GPB Capital and sharing it with the firm.  GPB Capital is the subject of multiple regulatory investigations and even an FBI referral which has left investors clueless to the fate of their investments.

GPB Capital Holding’s funds include:

GPB Cold Storage

GPB Automotive Fund

GPB Automotive Income

GPB Holdings II and III

GPB Waste Management

GPB NY Development

Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client after conducting due diligence.  Due diligence includes an investigation into the investment’s properties including its benefits, risks, tax consequences, issuer, history, and other relevant factors.  Appropriate due diligence would identify that an alternative investment’s high costs, illiquidity, and conflicts of interests that would make the investment not suitable for investors.

Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.