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GPB Capital Holdings Losses

Bakhtiari & Harrison is investigating the brokerage firms and sale practices regarding the sale of GPB Capital Holdings investments in high risk private placements. GPB Capital describes itself as a “New York-based alternative asset management firm that seeks to acquire income-producing private companies.”

GPB Capital, a private equity firm, successfully amassed over $1.5 billion in capital, predominantly invested in private limited partnerships focusing on auto dealerships and waste management businesses. These interests in GPB funds were distributed and sold through a network of more than 60 brokerage firms.

However, following its failure to meet the April 30, 2018, deadline for registering the raised funds as required by financial regulations, GPB Capital has faced significant legal and regulatory challenges. Notably, the firm’s Manhattan offices were subjected to a search by the FBI, indicating a serious inquiry into its operations. Additionally, the Securities and Exchange Commission (SEC) has also taken action by issuing a subpoena to GPB, demanding further information on its fundraising and operational practices.

In situations involving potential financial misconduct and regulatory breaches such as those faced by GPB Capital, the role of attorneys becomes critical. Attorneys well-versed in securities law are crucial for navigating the complexities of regulatory compliance and defending against investigations by federal agencies. These legal professionals provide invaluable support in examining the details of the case, advising on the best legal strategies, and representing the involved parties in negotiations or court proceedings.

For investors and brokerage firms connected with GPB funds, consulting with knowledgeable attorneys is essential. These legal experts can offer guidance on how to proceed in light of the investigations and potential implications for their investments. They can also help safeguard the interests of investors who may have been affected by the alleged regulatory violations or any fraudulent practices.

Moreover, attorneys can assist GPB Capital and other entities in responding effectively to regulatory inquiries, ensuring that all communications and disclosures meet legal standards and help mitigate any potential legal repercussions. By providing expert legal counsel, attorneys play a pivotal role in managing complex financial litigation, regulatory compliance issues, and in helping restore investor confidence in the wake of such significant investigations.

In September 2018, Massachusetts Secretary of the Commonwealth William Galvin announced an investigation into 63 broker-dealer firms that sold private placements from GPB, including (amongst others): Royal Alliance Associates Inc., Sagepoint Financial Inc., FSC Securities Corp., Woodbury Financial Services Inc., Newbridge Securities, Ladenburg Thalman and Hightower Securities.

In November 2018, Crowe LLP, the firm’s auditor, resigned.

On June 21, 2019, GPB Capital reported significant losses in the value of GPB Holdings II and GPB Automotive Portfolio, which declined more than 25% and 39%, respectively. GPB’s other funds reported declines in estimated value ranging from 25% to 73%. Following the announcement, Fidelity Investments instructed its broker-dealer clients to remove GPB Capital-issued private placements from the Fidelity platform within 90 days. The GPB Capital funds are:

If you are an investor that lost more than $100,000 in GPB related losses you should consider all legal options. If you wish to discuss your particular situation and the potential for the recovery of your investment losses, or you have information of interest, please contact us for an evaluation of your potential case.