The law offices of Gana Weinstein LLP continue to report and update investors on their investigation into GPB Capital Holdings (GPB Capital). The firm currently represents multiple clients who have been recommended GPB Capital by brokers who were paid large commissions to sell the investment.
GPB Capital has been plagued with issues since last year when the firm stopped raising new money, lost an auditor, and engaged in a lawsuit with a former business partner Patrick Dibre (Dibre). GPB Capital complained that Dibre reneged on the sale to GPB Capital of certain auto dealerships causing the fund to lose $40 million according to GPB’s complaint. Dibre counterclaimed that GPB Capital is nothing more than “a very complicated and manipulative Ponzi scheme.” Then it was reported that the Financial Industry Regulatory Authority Inc. (FINRA) and the Securities and Exchange Commission (SEC) launched investigations in to GPB Capital.
Now, according to newsources, GBP Capital is being investigated by the FBI who made an unannounced visit to GPB Capital’s offices in early March 2019. None of this information is good news for investors who relied upon the due diligence efforts of their brokers in agreeing to invest in GBP Capital offerings.
Brokerage firms are unfortunately all too willing to subject their clients to the risks of investing in GPB due to the hefty fees and commissions these firms earn. When GPB Capital’s Automotive portfolio raised a total of $369.2 million from more than 3,800 investors it paid out $43.4 million, or 11.75%, in commissions. 7% of that amount goes directly to the recommending broker’s pocket. 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.