National Financial Services Gives GPB Investors Deadline

National Financial Services Customers Have 60 Days To Transfer GPB Investments

Five months after announcing that investors of GPB Capital Holdings private placements would no longer be carrying these alternative investments (AI) on its platform, National Financial Services (NFS) is sending letters to customers notifying them that they have 60 days after January 14, 2020, to transfer their GPB Holdings II securities.

The GPB Holdings II securities must be transferred to another custodian broker or their alternative investment (AI) positions will be registered directly in their name. This is one of the larger GPB private placement funds that, as of June, had reported a 25.4% drop in value. National Financial Services (NFS) is a Fidelity Investments clearing and custody unit.

NFS had initially given brokerage firm clients 90 days from the time of the announcement to move their GPB private placements to a different platform. Addressing the reason for why it would no longer carry these investments, a Fidelity spokesperson said that GPB Capital had failed to fulfill the firm’s policy for alternative investments on its platform.

The unit’s decision to remove the GPB investments comes following more than a year of troubles, allegations, and other bad news surrounding GPB Capital Holdings and its funds. These have included accusations that the company was operating a $1.8B Ponzi scam, as well as ongoing investigations by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and the Federal Bureau of Investigation (FBI).

Failure To Move GPB Investment Could Lead To More Taxes

In a recent letter sent by National Financial Securities to one account holder, the clearing and custody brokerage firm stated that because all of the customer’s AI positions are in a retirement account (IRA). A failure to move the positions to a different IRA at another financial custodian by the deadline could lead to tax consequences — meaning potentially more losses on the GPB investments.

The customer who received this letter happens to be an Arkadios Capital client. Arkadios is one of the brokerage firms that our GPB investment fraud lawyers at Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) have already gone after on behalf of investors seeking to recoup losses they’ve suffered because they purchased a GPB private placement.

GPB Investments: Other Funds Experiencing Dramatic Plunges

Unfortunately, it isn’t just the GPB Holdings II fund that has seen such a significant decline in value. The GPB Automotive Portfolio reported a 39% drop, while some of the smaller GPB funds are experiencing 25-73% plunges.

Considering that most brokers sold these private placements in $50K to $100K chunks, the losses for investors from the decline in value alone has been significant – not to mention that investor redemptions were suspended nearly a year ago.

Meanwhile, the allegations of a $1.8B Ponzi scam grow louder, with former GPB business partners making these very same accusations in their own lawsuits targeting the alternative asset firm. Also, the number of investor fraud claims against the more than 60 brokerage firms and their brokers that collectively made over $160M in commission from recommending and selling these investments continues to grow.

GPB Investor Fraud Lawyers

Throughout the US, our GPB investment fraud lawyers are hard at work working with investors that are fighting to recoup the losses they suffered because broker-dealers and their registered representatives convinced them that investing in a GPB fund was a wise investment choice.

Contact our investment fraud attorneys at SSEK Law Firm today for a free, no-obligation case consultation so that we can help you explore your legal options.