GPB Capital, Alleged Ponzi Scheme, Riddled with Lawsuits from Former Investors

GPB Capital is facing allegations that it used money from new investors to pay older investors.

The Sonn Law Group is investigating allegations that GPB Capital operated a Ponzi-like scheme. Under FINRA Rules, brokerage firms are liable for their brokers’ misconduct or negligence and investors may be able to their investment through FINRA arbitration. Contact Sonn Law Group today or call us at 866–827–3202 for a free consultation.

GPB Capital Holdings is a New York-based investment firm that offers unregistered and high-risk private-placement securities through a number of individual limited partnerships.

Earlier this year, GPB Capital reported major losses in its two largest investment funds, which collectively held approximately $1.2 billion of investors’ money. GPB Capital funds were sold through more than 60 independent broker-dealers.

Several other organizations, including the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and the Massachusetts Secretary of the Commonwealth are conducting investigations into GPB Capital. The FBI also reportedly made an unannounced visit to GPB Capital’s offices in February 2019.

In a class-action lawsuit filed against GPB Capital in Austin, Texas, the complainants alleged that GPB created a series of complex holding companies and faulty accounting and auditing procedures to run the alleged scheme.

GPB allegedly promised investors returns of 8% annually, but those returns were not generated by investments in auto dealers or other businesses but paid for by tapping the capital from the next round of investors, or in some cases the capital of the investor himself, the complaint alleges. These are typical allegations of a Ponzi scheme.

GPB’s accountants issued “documents and audits that were at times blatantly false and consistently misleading,” according to the complaint. The allegations in the new complaint add to multiple allegations already facing GPB and the 60 broker-dealers that sold the funds, which were marketed as “private equity” type investments to wealthy clients.

Jeffrey R. Sonn is an experienced investor losses attorney. If you suffered losses because a financial professional committed acts in violation of FINRA Rules, Mr. Sonn will protect your rights and interests. Please do not hesitate to contact the Sonn Law Group today for a free review of your claim.