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GPB Capital Holdings LLC started in 2013, buying auto dealerships. It reportedly has raised a total of $1.5 billion from more than 4,000 investors in a series of private placement funds:
-GPB Automotive Portfolio, LP
-GPB Cold Storage, LP
-GPB Eurobond Finance PLC
-GPB Holdings II, LP
-GPB Holdings, III, LP
-GPB Holdings Qualified, LP
-GPB Holdings, LP
-GPB NYC Development
-GPB Scientific, LLC
-GPB Waste Management, LP formerly: GPB Waste Management Fund, LP.
GPB utilized a network of brokerage firms to sell private placement interests to retail customers. It has been reported that the following brokerage firms were involved in the sale of GPB Capital Holdings family of funds: Accelerated Capital Group, Advisory Group Equity Services, Ltd, Aegis Capital Corp, Aeon Capital, Inc., American Capital Partners, LLC, Arete Wealth Management, LLC, Arkadios Capital, Ascendant Alternative Strategies, LLC, Ausdal Financial Partners, Inc., Avere Financial Group, LLC, Axiom Capital Management, Inc., BCG Securities, Inc., Benjamin & Jerold Brokerage I, LLC, Cabot Lodge Securities, LLC, Calton & Associates, Inc., Cape Securities, Inc., Capital Financial Services, Inc., Capital Investment Group, Inc., Cascade Financial Management, Inc., Center Street Securities, Inc., Coastal Equities, Inc., Colorado Financial Service Corp., Concorde Investment Services, LLC, Crown Capital Securities, L.P., Crystal Bay Securities, Inc., H. Hill Securities, LLLP, David A. Noyes & Company, Dawson James Securities, Inc., Dempsey Lord Smith, LLC, Detalus Securities, LLC, DFPG Investments, Inc., Dinosaur Financial Group, LLC, Emerson Equity LLC, Financial West Group, FSC Securities Corp., Geneos Wealth Management, Inc., Great Point Capital, LLC, Hightower Securities, LLC, IBN Financial Services, Inc., Innovation Partners LLC, International Assets Advisory, LLC, Investment Architects, Inc., Kalos Capital, Inc., Kingsbury Capital, Inc., Landolt Securities, Inc., Lewis Financial Group, L.C., Lion Street Financial, LLC, Lowell & Company, Inc., Madison Avenue Securities, Inc., McDonald Partners LLC, McNally Financial Services Corp., Moloney Securities Co., Inc., Money Concepts Capital Corp., MSC – BD LLC, National Securities Corp., Newbridge Securities Corp., Orchard Securities, LLC, Pariter Securities, LLC, Private Client Services, LLC, Purshe Kaplan Sterling Investments, Royal Alliance Associates, Inc., Sagepoint Financial, Inc., Sandlapper Securities, LLC, SCF Securities, Inc., Sentinus Securities, LLC, Silber Bennett Financial, Inc., Stephen A. Kohn & Associates, Ltd, Triad Advisors, LLC, Uhlmann Price Securities, LLC, United Planners’ Financial Services of America, LP, Vanderbilt Securities, LLC, Vestech Securities, Inc., Western International Securities, Inc., Westpark Capital, Inc., Whitehall-Parker Securities, Inc., Wilmington Capital Securities, LLC, Windsor Street Capital, LP, and Woodbury Financial Services, Inc..
The brokerage firms and brokers working at those firms were incentivized to sell the GPB funds by commissions rates of nearly 8%. GPB is said to have paid more than $100 million in commissions to brokers and brokerage firms that sold the risky GPB private placements.
According to public reports, trouble for GPB started in 2017 when it sued a former business partner who allegedly reneged on a sale of multiple car dealerships. Among other claims, GPB Capital Holdings sought the return of $42 million it had paid to the former business partner. Within the same proceeding, it was alleged that GPB was a “very complicated and manipulative ponzi scheme."
Then, in April 2018, GPB Capital Holdings, failed to provide the SEC with required financial reports and a few months later announced that no new investor capital would be accepted. According to public reports, the firm is “straightening out” the accounting for two of its larger funds – GPB Holdings II and GPB Automotive Portfolio.
Shortly after GPB’s announcement, Massachusetts securities regulators announced an investigation into 63 broker-dealers who allegedly sold GPB private placements. GPB’s auditor also recently resigned, citing perceived risks, and securities regulators Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) also have launched independent investigations into GPB Capital Holdings and those broker-dealers that sold GPB Funds.
In addition, in July 2019, David Rosenberg, a chief executive of Prime Automotive Group, filed another lawsuit against GPB in Massachusetts Superior Court, alleging a “massive securities fraud” in which it used money from investors to prop up the performance of auto dealerships it owns, as well as to finance payments to other investors.
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