GPB Private Placements

Shepherd Smith Edwards and Kantas Files Investor Fraud Lawsuit Against Money Concepts Capital for GPB Capital Sales

Published on: October 8, 2019 | by Shepherd Smith Edwards & Kantas, LLP

GPB Capital Sales: SSEK Files Investor Fraud Lawsuit Against Money Concepts Capital

Two investors in Alabama are pursuing a Financial Industry Regulatory Authority (FINRA) claim against Money Concepts Capital Corp. These investors sustained losses after one of the independent brokerage firm’s longtime registered representatives recommended that they purchase GPB Capital private placements.

Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) is representing both claimants in their investor fraud claim.

Investor’s GPB Private Placement Claim Against Arkadios Capital Gets FINRA Hearing

Published on: September 13, 2019 | by Shepherd Smith Edwards & Kantas, LLP

An investor who filed an arbitration claim against Arkadios Capital for selling her GPB Capital Holdings private placements now has a hearing date set before a Financial Industry Regulatory Authority (FINRA) panel: April 20, 2020. This is one of the first GPB investor fraud case brought against a brokerage firm to get a hearing scheduled before one of the self-regulatory authority’s (SRO) arbitrators. Our broker fraud lawyers at Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) are representing this claimant.

The investor, who is a woman from the greater Atlanta, Georgia area, is claiming hundreds of thousands of dollars in retirement fund losses after her financial adviser, an Arkadios broker, recommended the GPB securities to her. While with the broker-dealer, her portfolio became especially concentrated in private placements, including the GPB Holdings II Limited Partnership. Now, the claimant is contending that this GPB investment, in particular, was an extremely unsuitable recommendation for her, especially since it involved her IRA from which no losses can be offset.

Our client maintains that she was not aware of the risks involved in the investment strategy used by her Arkadios broker. She is alleging unsuitable recommendations, omissions, misrepresentations, gross negligence, due diligence failures, breach of fiduciary duty, negligence, and inadequate supervision. The investor is seeking damages, interest, and costs.

Texas Investor Says Kalos Capital Advisor Inappropriately Recommended GPB Private Placements

Published on: August 5, 2019 | by Shepherd Smith Edwards & Kantas, LLP

A Texas investor has filed an investor fraud claim against Kalos Capital, Inc. and its financial advisor Joshua Daniel Stivers, who operated under the name Platinum Wealth Advisory. The retired investor claims that Stivers promised her an investment plan that was low risk and conservative. Instead, the Kalos Capital advisor allegedly employed an unsuitable employment strategy that was improperly allocated and involved investing in private placements, including the GPB Holdings II, LP Fund.

The investor contends that this has resulted in substantial losses for her. Now, she is seeking up to $500K, with interest, plus costs.

GPB Private Placements Funds

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.

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.