What Did Your Brokerage Firm or Investment Adviser Do Wrong With GWG
Published On: February 5, 2021

Stoltmann Law Offices, a Chicago-based investor rights and securities law firm, has been representing investors in cases against brokerage firms that sold the private placement limited partnership offerings in several GPB Funds, including:

  • GPB Automotive Fund
  • GPB Holdings Fund II
  • GPB/Armada Waste Management Fund
  • GPB Cold Storage Fund

We are currently representing dozens of investors in FINRA Arbitration cases against numerous brokerage firms that aggressive sold these GPB Funds to their clients, including:

  • National Securities Corp
  • FSC Securities
  • Cetera Advisors
  • Concorde Investment Services
  • David A. Noyes
  • Dempsey Lord Smith, Coastal Equities
  • Geneos Wealth Management
  • Hightower Securities
  • Money Concepts
  • Arete Wealth Management
  • Ausdal Financial
  • Newbridge Securities
  • Sagepoint Financial
  • Royal Alliance

The basis for our clients’ cases against these brokerage firms begin with the firm’s due diligence process. How could a sophisticated investment company, with licensed professionals, perform real industry-standard due diligence on GPB Capital and still approve the funds for sale to their clients? This obligation goes beyond the financial advisor or broker. The compliance and due diligence personnel at these brokerage firms are supposed to fully vet companies like GPB before the brokers even know the deal exists. Our extensive work on these cases reveal an all too common theme.  Brokerage firms collect paper, check boxes on a list, close their eyes and hope whatever mess is discovered is arguably disclosed in the offering memorandum, and they instruct their brokers to sell, sell, sell.  Proper due diligence would have refused to approve GPB from the beginning. Right off that bat, what was disclosed did not add up. According to the criminal indictment against GPB executives, 14% of the money investors put into the fund, went to pay fees and costs.  What this means is, instantly, what was 100%, was now 86%. Still, GPB represented it would provide, minimum, 7% return on investment per month, with additional “special” dividends possible. GPB represented this distribution would be paid by funds from operations, but in reality, it never came close. From the start, GPB paid investor distributions with funds from investors – it took your money and gave it to another investor. That is a Ponzi scheme. That is why GPB’s executives face criminal charges.

There were dozens of other troubling facts about GPB that should have alerted competent due diligence that GPB should not be sold. In fact, by mid-2017, some brokerage firms started to pull GPB from their sales platforms, while others just continued to sell well into 2018.

Suitability is a two-pronged rule.  The first part of FINRA Rule 2111 is the due diligence requirement set forth above. The second part is the customer-specific suitability requirement, which means that brokers can only recommend investments that are suitable based on the client’s objectives, risk tolerance, and financial resources.  Many times, brokers flat-out misrepresented the risks and characteristics of GPB, including representations that GPB would “go public”, that investors could withdraw their money at any time, or that GPB was not correlated or linked to the stock market, so it was a good hedge to stock market risk. These representations, or any like them, were totally false and could form the basis for a securities fraud claim.

These cases are filed in FINRA Arbitration. The process takes about a year, start to finish, and we push for our clients to be fully compensated for their investment losses, attorneys fees, interest, and punitive damages. If you invested in any GPB Capital Funds, please contact Stoltmann Law Offices at 312-332-4200 for a no-obligation, free initial consultation with an investment fraud attorney. We offer representation nationwide on a contingency fee basis which means we do not get paid until you do!


The posting on this site are mere OPINIONS and NOT statements of fact in any way whatsoever. The information should not be relied upon and there have been no findings made against the firms or individuals referenced on this site. In addition, this Blog is made available for educational purposes only and incorporates information from the web as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and Stoltmann Law Offices (161 N Clark Street 16th Floor Chicago, IL 60601). The Blog opinions should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.


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If you have suffered financial losses because of the negligence or fraud of your financial advisor or broker through unsuitable investment recommendations, over-concentration, churning, misrepresenting risks, conversion or selling away, you have legal rights and options to pursue recovery of those losses.

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