What Did Your Brokerage Firm or Investment Adviser Do Wrong With GWG
Published On: July 6, 2021

Chicago-based Stoltmann Law Offices is currently representing investors who’ve suffered losses from financial advisor and brokers who sold them private offerings in GPN Automotive Fund, GPB Holdings Fund II, and GPB Waste Management Fund.

Earlier this year, executives with GPB Capital were indicted for fraud and allegedly running a $1.8 billion Ponzi scam involving more than 17,000 investors. Also involved in the swindle were 60 broker-dealers who sold the GPB “private placements” to investors, reaping 8% commissions on each sale, based on shoddy due diligence.

Financial advisors and brokers who sold GPB limited partnerships could be on the hook as investors attempt to recover their losses. Jeffery Raymond Dixson, a former broker registered with Madison Avenue Securities in Vancouver, Washington, for example, faces multiple investor disputes for selling GPB vehicles.

“Madison Avenue Securities is one of the many broker-dealers that earned handsome commissions from the sale of these private placements,” notes alphabetastock.com. “It is estimated that a total of $160 million was earned as commissions by broker-dealers for the sale of GPB Capital Holdings.”

According to Investment News, GPB Capital executives “allegedly manipulated the financial statements of certain limited partnership funds managed by GPB Capital to perpetuate the deception. Those financial statements gave the false appearance that the funds’ income was closer to generating sufficient income to cover the distribution payments than it actually was.”

Investors in GPB partnerships stopped receiving payments in December, 2018. “GPB executives, using the marketing broker-dealer Ascendant Alternative Strategies, told investors that the distribution payments were paid exclusively with monies generated by GPB Capital’s portfolio companies. GPB Capital actually used investor money to pay portions of the annualized 8% distribution payments, fitting the definition of a Ponzi scheme,” the US Securities and Exchange Commission (SEC) alleged in its complaint, as reported by Investment News.

The SEC’s complaint further alleges that “GPB Capital and Ascendant Capital made misrepresentations to investors about millions of dollars in fees and other compensation,” received by several GPB executives. “The scheme allegedly continued for more than four years in part because GPB Capital kept investors in the dark about the limited partnership funds’ true financial condition,” according to the SEC, and failing to deliver audited financial statements and register two of its funds with the Commission.

The GPB partnerships fell into a higher-risk group of “alternative” investments, which are complicated, loaded with high fees and generated outsized commissions for broker-advisors. Alternative vehicles are often illiquid, meaning it’s difficult or extremely costly to withdraw your funds. As such, they are generally unsuitable for low-risk investors interested in secure retirement income and protection of principal. To make matters worse, investor disclosures are muddied by legalese and indecipherable financial jargon. They are often so opaque that clients don’t know what they are investing in – or how much they are being overcharged.

Firms are also legally required by FINRA to monitor and supervise what their brokers are selling – their investments must be vetted and authorized by the firms – and have an obligation to investors to fully reveal true risk and return information about the vehicles sold. Furthermore, specific to private placements like GPB, brokerage firms are required to pre-clear the deals through a rigorous due diligence analysis pursuant to FINRA Regulatory Notice 10-22, amongst other rules and regulations. Investors can file FINRA arbitration complaints if these rules are broken.

If you invested with a broker-advisor and lost money as a result, you may have a claim to pursue through FINRA Arbitration. Please contact Stoltmann Law Offices, P.C. at 312-332-4200 for a free, no obligation consultation with a securities attorney. Stoltmann Law Offices is a contingency fee law firm 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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