Our firm represents multiple clients who have been recommended GPB Capital Holdings (GPB Capital) related investments. GPB invests in a variety of businesses but primarily in auto dealerships and waste management businesses. However, over the past year controversy has embroiled GPB Capital in a saga including multiple regulatory investigations and even an FBI referral which has left investors clueless to the fate of their investments.
According to our investigation Kalos Capital, Inc. (Kalos Capital) and its brokers including Jason Mosher (Mosher) have recommended GPB Capital private placements to investors. Investors at this point should prepare themselves for the worst possible outcomes including significant losses on their investments. Investors who have invested in GPB Capital are encouraged to contact us for a free consultation.
As a background, financial advisers sold $1.5 billion of these high-risk private placements offered by GPB Capital Holdings. More than a year ago GPB Capital was supposed to file registration forms with the SEC for two of its largest funds to make certain accounting and financial disclosures required under the securities laws. However the company did not meet its deadline back in April 2018 and now over a year later has no firm date when annual reports for the two funds will be filed and the public has no clue what those values will look like. It is highly unusual for an audit of a fund to take over a year without any material update to investors. Even the largest of publicly traded companies that have accounting irregularities rarely take this long to make a restatement of their accounting numbers. However, GPB has merely told investors to continue to be patient as the company has come up with never ending excuses that follow an all too familiar pattern in an industry wracked with fraud and abuse.
All the red flags are now present. Last year GPB Capital stopped raising money, had its auditor resign, and engaged in a lawsuit with a former business partner. GPB Capital’s former business partner counter claimed that GPB Capital is nothing more than “a very complicated and manipulative Ponzi scheme.”
Then the Financial Industry Regulatory Authority Inc. (FINRA) and the Securities and Exchange Commission (SEC) launched investigations in to GPB Capital. Thereafter, the FBI opened an investigation into GPB Capital making an unannounced visit to GPB Capital’s offices in early March 2019.
There are as many as 60 brokerage firms that sold these funds and among the largest of those firms are Royal Alliance Associates Inc., Sagepoint Financial Inc., FSC Securities Corp. and Woodbury Financial Services Inc. Brokerage firms are unfortunately all too willing to subject their clients to the risks of investing in securities like GPB due to the hefty fees and commissions these firms earn. Commissions and fees on GPB reach as high as 11.75% and 7% of that amount goes directly to the recommending broker’s pocket.
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. In particular, due diligence on private placements is of the utmost importance because there is no publicly available information on this companies and businesses and the only access to material information comes from the brokerage firm.
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.