Current Investigations

Wells Fargo Settles Inadequate Supervision of Non-Traditional ETFs Claim for $35M

Published on: March 4, 2020 | by Shepherd Smith Edwards & Kantas, LLP

Wells Fargo Sold Non-Traditional ETFs to Retail Investors

If you were an investor who suffered losses in non-traditional exchange-traded funds (ETFs) that you feel were unsuitable for you yet were recommended by a Wells Fargo investment advisor or broker, our ETF fraud attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm) would like to offer you a free case consultation.

Wells Fargo Advisors Financial Network and Wells Fargo Clearing Services recently agreed to pay $35M to settle US Securities and Exchange Commission (SEC) claims. These claims accused the two Wells Fargo entities of lax supervision of their registered investment advisors (RIAs). As well as the brokers who recommended certain complex non-traditional ETFs to retirees and other retail advisory and brokerage customers.

Shepherd Smith Edwards & Kantas Files GPB Capital Private Placement Fraud Case Against International Assets Advisory

Published on: February 20, 2020 | by Shepherd Smith Edwards & Kantas, LLP

Texas-Based Broker Sold GPB Private Placements To Retiree Couple

Once again, Shepherd Smith Edwards and Kantas (SSEK Law Firm) has filed an investor fraud claim against a broker-dealer after its financial advisor sold investments in GPB Capital Holding’s funds to customers.

This time, the brokerage firm is International Assets Advisory (IAA), LLC and the broker involved is Williams Keen Butcher who is based in Houston.

SSEK Investigates Woodbury Financial Broker Daryl Serizawa Over GPB Capital Private Placements

Published on: January 21, 2020 | by Shepherd Smith Edwards & Kantas, LLP

Woodbury Financial Services Representative Accused Of GPB Private Placements Sales

If you are an investor who was sold GPB Capital private placements by Woodbury Financial Services broker Daryl Serizawa, our broker fraud lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm) want to talk to you.

Serizawa is one of the hundreds of financial representatives who sold GPB funds to customers. These brokers and their firms earned more than $160M in commissions. Now, GPB Capital Holdings, an alternative asset firm that invests in auto dealers and waste management, is accused of operating a $1.8B Ponzi scam.

Shepherd Smith Edwards & Kantas investigates Marcus Boggs, a former Merrill Lynch Financial Advisor

Published on: September 23, 2019 | by Shepherd Smith Edwards & Kantas, LLP

Shepherd, Smith, Edwards & Kantas (“SSEK”), a law firm specializing in representing wronged investors, is looking into allegations by the SEC against former Merrill Lynch financial advisor, Marcus Boggs (“Boggs”). Boggs reportedly joined Merrill Lynch in 2006, working in the company’s Chicago office. The SEC has alleged that Boggs stole client funds in excess of $1.7 million. The stolen assets were used to cover personal expenses, including credit card charges. According to the SEC, Boggs sought to portray himself as a pillar of the Chicago community, involving himself with various charities and attending social events in an effort to ingratiate himself with the city elite. Also, according to the SEC, Boggs maintained he managed of $40 million in assets for his clients.

Merrill Lynch fired Boggs over the SEC charges in December of 2018. Had Merrill been properly supervising Boggs, the company may have prevented some of the theft. According to FINRA, Boggs has three complaints on his official record all involving unauthorized transfers from client accounts. Merrill wisely sought resolution of these matters and it appears none have actually gone to hearing.

SSEK has experience in representing customers of financial advisors who either stole their money, or stole the money of other clients. SSEK’s experience shows that before a financial advisor begins stealing money, he or she often does other things that are wrong for clients, such as unsuitable investing, churning, unauthorized trading or other misconduct. Even after theft is uncovered, those other wrongs often go unnoticed and are never addressed without a customer hiring a law firm like SSEK.

UBS Yes Strategy Investors File Fraud Claims

Published on: August 31, 2019 | by Shepherd Smith Edwards & Kantas, LLP

Clients of UBS Group AG (UBS) who employed the firm’s Yield Enhancement Strategy (YES) are now filing investor fraud complaints after suffering at least $60M in losses to date. YES involves options trades and borrowing that was supposed to be “safe” and low risk while earning investors positive returns.

The complex investment strategy did just that while the market was stable but the volatility that ensued last year–the worst to hit the market in 30 years– caught investors by surprise. The Wall Street Journal reports investor losses of over 13% in one month alone. However, Seeking Alpha reports that losses have been as high as 20% for some investors.

For example, according to the WSJ, Sherrie Pellini, a 60-year-old UBS customer who financially supports her mom and three kids, invested $3M in the UBS YES Strategy and was charged 1.75%. She now claims her losses were $750K. Pellini is accusing UBS broker Robert Perlman of telling her that YES had not resulted in any losses for 17 years.

Investors of GPB Capital Holdings Funds File Class Action Securities Fraud Lawsuit

Published on: August 19, 2019 | by Shepherd Smith Edwards & Kantas, LLP

The first class action securities case against GPB Capital Holdings has been filed. The alternative asset management firm, which invests in waste auto management companies and car dealerships, is accused of operating a $1.8B dollar Ponzi scam that caused thousands of investors to suffer major losses. Now, investors of two of its funds are demanding that GPB fulfill its duty to provide yearly audited statements. GPB has not issued these statements since 2017.

The lead plaintiffs in the case, Victor Wade of Texas and Karen Loch of Georgia, both bought into the GPB funds as limited partnerships. Wade invested $50K in GPB Holdings II through Sagepoint Financial. Loch invested $75K in GPB Automotive via Royal Alliance Associates. Both brokerage firms are Advisor Group, Inc. subsidiaries.

Loch and Wade are suing on behalf of investors of the GPB Holdings II fund and the GPB Automotive Portfolio Fund. They have named the two funds, GPB Capital Holdings, its CEO David Gentile, COO Roger Anscher, CFO William Jacoby, and a number of Doe parties as the defendants.

SSEK Investigates Darren Oglesby and Money Concepts Capital

Published on: August 2, 2019 | by Shepherd Smith Edwards & Kantas, LLP

Did you invest with Darren Oglesby (Monroe, LA) and/or Money Concepts Capital Corp. and suffer losses in GPB Capital or other private placement transactions? If so, we may be able to help you recover your losses.

Shepherd, Smith, Edwards & Kantas, a national law firm dedicated to representing wronged investors, is investigating claims on behalf of current and former clients of Darren Oglesby and/or Money Concepts Capital Corp. who were sold GPB Capital and other private placements, such as non-traded real estate investment trusts (“REITs”). Private placements, such as GPB Capital, are often marketed to investors as safe ways to obtain a higher return. In truth, these investments are high-risk securities and typically illiquid and impossible to accurately price.

GPB Capital is a good example of what can go wrong with such private placements and why they are supposed to only be sold to very sophisticated investors willing to take high risks. For GPB Capital, the company raised a reported $1.8 billion from investors nationwide. Nevertheless, it has been more than a year since the company failed to make required SEC reports. Since then, financial information has been consistently delayed, the company’s auditor quit, several regulators have opened investigations into GPB Capital, the FBI raided the company’s offices in New York, a former business partner accused the company of being a “Ponzi scheme” and a current business partner has publicly reported accounting irregularities.

GPB Capital Sued by Another Business Partner Alleging Financial Misconduct

Published on: July 31, 2019 | by Shepherd Smith Edwards & Kantas, LLP

David Rosenberg, the CEO of Prime Automotive Group and a business partner of GPB Capital Holdings, is suing the private placement issuer in a Massachusetts Superior Court. According to Rosenberg’s complaint, GPB Capital has been operating a Ponzi-like scam that involved using investors’ funds to pay other investors and enhance its auto dealerships’ performances. Rosenberg is now the second former GPB Capital business partner to allege in public filings that GPB is essentially operating a Ponzi Scheme.

GPB Capital is a New York-based issuer of risky private placements that is invested primarily in auto dealerships and trash hauling companies. The firm has been under close scrutiny in the wake of allegations that it engaged in financial misconduct and as the value of its numerous GPB funds have dropped significantly from around $1.8 Billion down to about $1 Billion.

The U.S. Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), the Federal Bureau of Investigation (FBI), the New York City Business Integrity Commission, and the New Jersey Bureau of Securities are all investigating GPB Capital and its various funds. Additionally, Massachusetts Secretary of the Commonwealth William Galvin is investigating more than 60 brokerage firms whose brokers sold GPB private placements to investors. The “temporary” cessation of distributions to investors, since late last year, the firm’s failure over the last two years to provide financial statements, and its auditor’s resignation without completing its audit last year have only served to raise questions and increase concerns.

GPB Capital Funds Continue To Plunge In Value

Published on: July 19, 2019 | by Shepherd Smith Edwards & Kantas, LLP

According to InvestmentNews, alternative asset management company GPB Capital Holdings has notified investors and custodians that its different private placement funds have recently suffered 25-73% losses in value. It’s largest funds, the GPB Automotive Portfolio and GPB Holdings II—together, these two raised $1.27B from investors—have experienced 38% and 25.4% drops, respectively. Such significant losses are clearly not good for investors, who, collectively, have invested about $1.8B in all of the GPB funds.

These private placement funds are invested mostly in waste management and car dealerships and they, along with GPB Capital Holdings, have come under intense scrutiny by both the government and investors. Set up in 2013, the company last year suspended all redemptions involving its funds. An auditing company retained by GPB Capital stepped down in November not long after questions regarding the company’s accounting practices and sales methods arose.

About 60 broker-dealers have sold GPB funds to investors. Advisers usually make a substantial commission for selling the private placements—a typically higher rate than what they’d get for selling mutual funds.

Brokerage Firms Made over $165 Million for Selling GPB Capital Private Placements

Published on: July 1, 2019 | by Shepherd Smith Edwards & Kantas, LLP

Investment News is reporting that broker-dealers and their brokers that sold GPB Capital Holdings private placements to investors have collectively been paid $167 million in commissions. That large number represents 9.3% of the $1.8 billion that supposedly accredited, wealthy investors paid for these risky private placements. Recent reports had estimated that the commissions paid were lower, at around $100 million (about 7% per transaction), but GPB Capital has apparently confirmed the much larger number.

While brokers and broker-dealers are allowed to make up to a 10% commissions for selling financial products to clients, very few investments pay such a high rate. However, private placements, such as GPB Capital, entice brokers and their firms to sell such risky investments by offering much higher commissions and fees.

For private placements, it is not uncommon for financial representatives to earn around 7% in commissions, with another 2% going to the brokerage firm. In comparison, mutual funds and other similar investments typically pay less than half as much in commissions.