Michael Cohn Allegedly Stole Information About SEC Probe Into GPB Ponzi Scam Allegations
Nearly a year after he was charged with obstruction of justice, Michael Cohn, the former Chief Compliance Officer of GPB Capital Holdings, has pleaded guilty to the misdemeanor crime of theft of government property.
The initial charges against him had been classified as federal crimes and included obstruction of justice, unauthorized disclosure of confidential information, and unauthorized computer access.
Cohn was fired by GPB Capital after prosecutors charged him. Before working for the alternative asset firm, the ex-CCO was a US Securities and Exchange Commission (SEC) examiner. The government contends that Cohn took proprietary information related to the regulator’s investigation into GPB Capital, using this as an incentive for the company to hire him. He then allegedly shared the information with GPB executives.
Cohn maintains that he never disclosed such information with anyone at GPB. His sentencing hearing is scheduled for January 2021.
Our securities fraud lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm) have spent nearly two years investigating GPB Capital over allegations that it ran a $1.8B Ponzi scam. We represent investors in their Financial Industry Regulatory Authority (FINRA) arbitration claims against the broker-dealers and brokers who earned commissions from these GPB private placement sales.
GPB Capital Holdings Continues to Leave Investors Wondering What Happened to Their Money
The guilty plea involving Cohn is just the latest bad news headline involving GPB Capital Holdings, which invests in auto dealerships and waste management.
In July, the alternative asset firm reported in its Form ADV to the SEC that its assets under management (AUM) had declined by nearly $200M between the end of 2017 and June 2019—from $434M in AUM to $196.3M. That is a 45.2% plunge. A spokesperson for the company could provide no reason for such a huge loss.
Also in July, investors of the GPB Capital Holdings II were told that they would not be getting the key documents they needed to submit with this year’s tax filings—a deadline that was already postponed by three months due to COVID-19.
Recently, another auditor retained by GPB resigned. The company had been tasked with auditing one of the GPB private placement funds, Armada Waste Management. According to InvestmentNews, Highline Management Inc., which was set up earlier this year, is now overseeing the firm’s business affairs.
Meantime, the SEC, FINRA, and the Federal Bureau of Investigation (FBI) are continuing in their ongoing investigations into GPB Capital Holdings, which is facing its share of class action securities fraud lawsuits and litigation from two ex-business partners. These complaints accuse the company of operating a massive, complex Ponzi scheme.
GPB Private Placement Investors Continue to File Fraud Lawsuits Against Broker-Dealers
With redemptions suspended, all of the GPB Funds plunging in value, no statements provided over the value of their private placements—that is, if they are worth anything at all—investors are turning to the brokerage firms and their registered representatives that sold them these investments to recover their losses.
About 60 broker-dealers made more than $167M in commissions from selling GPB private placements. Often, the customers who bought them were retirees or other retail investors for whom they were unsuitable.
GPB Investment Fraud Law Firm
SSEK Law Firm has filed stockbroker fraud claims against firms such as Kalos Capital, Arkadios Capital, Money Concepts Capital, Ameriprise, Triad Advisors, and many others on behalf of investors who purchased private placements in one of GPB Capital Holdings’ many funds.
If you invested in any of the following funds, contact our securities fraud lawyers today for your free case consultation.
- GPB Holdings II
- GPB Holdings III
- GPB Automotive Portfolio
- GPB Cold Storage
- GPB NYC Development
- GPB Waste Management