Elderly Investor Claims $250K in GPB Fraud Losses
In yet another GPB private placement fraud case, our broker fraud attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm) have filed a claim on behalf of an investor.
This time, the respondents are Pruco Securities and Kalos Capital, which the firm has gone after in previous private placements claims over the same investments and broker, Christopher Shaw. The claimant, who is an elderly woman from North Carolina is reporting over $250K in losses. She is seeking up to $500K in damages plus interests and other costs.
GPB is accused of operating a Ponzi scam that has cost investors over $1.5B. The alternative asset firm remains under investigation by numerous regulatory bodies including FINRA, the US Securities and Exchange Commission (SEC) and the FBI. Now, GPB private placements are at the center of hundreds of broker fraud claims. Over 60 brokerage firms and their registered representatives are believed to have made over $160M in commissions when these investments were sold.
Investors only have losses to report with all of the GPB funds having dropped in value, investor redemptions now suspended for over a year and the continued non-delivery of audited financial statements.
The latter, especially, has made it impossible for shareholders and regulators to determine whether these investments are still worth anything at all. At least two auditors have stepped down from working with GPB Holdings.
SSEK Investigating Pruco Broker Christoper Shaw
In this latest GPB fraud investigation, the claimant, who is in her seventies and a nursing home worker, had no investing experience whatsoever. She entrusted Shaw, first while he was at Kalos and then later at Pruco Securities, to handle all of her retirement savings.
The claimant was very clear that she needed liquidity and didn’t want to take on any risk. Her retirement funds were all she and her husband had for their later years.
Our client contends that Shaw, who presented himself as an expert in conservative investments, promised her that he would employ a conservative risk strategy when handling her funds and promised she could expect to make money. Instead, when he was a Kalos broker, he used an overaggressive strategy.
This included improperly allocating her assets and concentrating nearly 100% of her portfolio in private placements, including $250K in the GPB funds – GPB Holdings II and GPB Waste Management. He also invested her money in unregistered and untraded products.
What Are The Investor Fraud Claims Being Made?
Kalos Capital and its brokers are known for selling investment products that garner them good commissions including private placements, real estate investment trusts (REITs) and private mutual funds.
When Shaw became a Pruco Securities broker, he remained the broker of record for the claimant and such as reflected on documentation the claimant received. Now, our client is alleging the following:
- Misrepresentations
- Overconcentration
- Omissions
- Gross lack of supervision
- Failures of due diligence
- Unsuitable recommendations
- Breach of fiduciary duty
Christopher Shaw’s BrokerCheck record notes that during his 12 years in the industry, he has been a registered broker with three firms – Blackbird North America, Kalos Capital and now Pruco Securities.
There are two other pending customer complaints on his record. One claim alleges unsuitable investments and breach of fiduciary duty and seeks $350K in damages. The other alleges unsuitable investments in alternative investments, also while Shaw was a Kalos Broker and requests $450K in damages.
GPB Investment Fraud Attorneys
SSEK Law Firm looks forward to representing this claimant in front of FINRA arbitrators where we will continue to fight for her financial recovery from Pruco Securities, Kalos Capital and Christopher Shaw.
Already, our GPB fraud lawyers are expecting to appear before FINRA arbitration a number of times this year over GPB investor cases including fraud claims against Kalos Capital, Arkadios Capital, Ameriprise Financial, International Assets Advisory and others.
Our first hearing scheduled for April against Arkadios Capital is the first GPB case to go before one of the self-regulatory organization’s arbitration panels. If you are a GPB investor, contact SSEK Law Firm today.