Advisor Group Firms Raised Their Legal Reserves

Customers of Sagepoint Financial, Royal Alliance Associates, and FSC Securities Have Suffered Losses in the GPB Funds

According to InvestmentNews, three Advisor Group brokerage firms raised their reserves for expected “legal and regulatory matters” by up to three times last year. The firms disclosed this information in their 2020 Focus Reports, which are financial statements that they recently submitted with the US Securities and Exchange Commission (SEC).

Although the broker-dealers did not explain what they needed these added legal reserves for, they are among the dozens of financial firms that collectively earned over $160M in commissions from selling GPB private placements to investors.

Now, GPB Capital Holdings is facing an SEC lawsuit as well as other civil litigation accusing the alternative asset firm, its founder David Gentile, Ascendant Capital owner Jeffry Schneider, ex-GPB managing partner Jeffrey Lash, and two other entities of operating an over $1.7B Ponzi scam that defrauded over 17,000 investors all over the US.

InvestmentNews is also reporting that Triad Advisors, which is another Advisor Group broker-dealer that sold GPB investments to customers, has yet to file its 2020 Focus Report with the Commission.

However, the firm is definitely contending with multiple Financial Industry Regulatory Authority (FINRA) arbitration claims from customers seeking to recover losses they suffered from the GPB Funds. Already by March 2020, according to Triad Advisors’ last Focus Report, it was already facing GPB private placement fraud cases with potential damages at almost $2.3M.

Our experienced GPB investment fraud attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) are pursuing a number of these claims in FINRA arbitration against Triad Advisors and many of the other firms that recommended and sold investments in the GPB Funds.

Call us at (800) 259-9010 today.

Judge Suspends SEC Lawsuit Against GPB, Not Investors’ Fraud Claims Against Broker-Dealers

In the U.S. District Court for the Southern District of New York in Brooklyn, Chief United States District Judge Margo K. Brodie has suspended the SEC’s civil lawsuit against GPB Capital Holdings and the other defendants after Acting U.S. Attorney Seth DuCharme requested a stay.

DuCharme is looking to protect the secrecy of an ongoing grand jury investigation and stop any unsuitable discovery of issues involved in the criminal fraud case against Gentile, Schneider, and Lash.

Judge Brodie’s order, however, won’t impact the role of Joseph Gardemal III, an independent monitor appointed at the SEC’s request to supervise the New York private-equity firm’s operations. Gardemal will decide whether the alternative asset firm should go into receivership or bankruptcy.

The suspension also doesn’t impact the thousands of investor claims that have been brought against the broker-dealers and their registered representatives who are being pursued by their former customers for damages. Unfortunately, too many investors were unsuitably recommended GPB private placements by their brokerage firms and brokers. These customers were promised up to 8% returns from the GPB Funds. Instead, they are now grappling with significant investment losses, which they are fighting to recover.

Seasoned GPB Investment Fraud Attorneys

For more than 30 years, SSEK Law Firm has represented thousands of investors and recovered many millions of dollars on their behalf. We work with retail investors, retirees, small businesses, institutional investors, and high-net-worth individual investors.

If you suffered losses in any of the GPB private placements, allow our securities fraud law firm to help you explore your legal options. Contact us today at SSEK Law Firm for your free, no-obligation case consultation.