What Did Your Brokerage Firm or Investment Adviser Do Wrong With GWG
Published On: November 27, 2019

The news continues to get worse for the thousands of retail investors with money locked-up in various GPB Capital Funds. Those funds include the GPB Automotive Fund, GPB Waste Management Fund, and GPB Fund II, amongst others. Stoltmann Law Offices has been investigating these funds for several months. We have filed roughly two dozen FINRA Arbitration claims on behalf of our clients to recover their losses in these funds from the brokerage firms responsible for soliciting them to invest in these ill-fated private placements.

On November 22, 2019, GPB sent a letter to their “partners” informing them of some really bad news.  The recent indictment of GPB Capital’s Chief Compliance Officer by the United States Attorney for the Eastern District of New York for obstruction of justice, amongst other claims, has caused the auditing process to fall off the rails. All of those promises by GPB to investors, all of those promises repeated by financial advisors to their clients, that GPB was well on its way to finally providing restated, audited financial statements, have officially been broken. The letter states that GPB’s auditor has “decided to suspend work on outstanding financial statement audits. In addition, the Audit Committee has elected to resign effective ups the earlier of the completion of the Rosenberg Investigation or by November 27, 2019.” The “Rosenberg investigation” is the self-implemented third party investigation into how the company’s CCO obstructed justice, and what GPB knew and when it knew it. Well, according to the indictment, detailed on this blog last month, GPB hired the CCO with knowledge that he had confidential information obtained from his participation in the SEC’s investigation of GPB. They knew he had  obtained information from the SEC in the course of its investigation, it would seem, and GPB made him their chief compliance officer.

The November 22, 2019 notice also eviscerates another false narrative promoted by GPB and passed along to clients by financial advisors, who are scrambling at this point to come up with excuses.  Despite operating in a red-hot economy where car sales are through the roof, the GPB Automotive Fund has managed to lose over $200 million and GPB Holdings II has lost roughly $125 million.  To add insult to injury to the investors stuck holding this rapidly depreciating asset, GPB is not allowing investors to unload their units on secondary markets.  Unfortunately for investors, this is what a Ponzi scheme looks like when it is no longer able to attract new investor money.

Investors need to carefully consider all options to recover their losses in the GPB Capital funds. Our analysis of the offering memoranda establishes that from Day 1 GPB was riddled with internal conflicts of interest at every level of management. The company is a complicated network of interrelated entities, all of which are owned or controlled by few. These structures enable wrongdoing because there is no one around to keep watch and ensure investor proceeds are being deployed appropriately. That is why the auditor resigned last summer. That is why, again, the entire auditing committee – notwithstanding months of promises, is resigning effective today. The Brokerage Firms that sold GPB Capital, according to our investigation, include at least the following firms:

  • FSC Securities
  • National Securities
  • David A. Noyes
  • Geneos Wealth Management
  • Kalos Capital
  • Money Concepts
  • Concorde Investment Services
  • SagePoint Financial
  • Madison Avenue Securities
  • Woodbury Financial
  • Sandlapper Securities

According to published reports, the brokerage firm network used by GPB exceeded 60 firms. These firms sucked-up 10-12% commissions for selling GPB Capital to their clients. They all turned the other way when red flags appeared during the due diligence process so that they could grab those huge commissions. In many instances, advisors misrepresented material facts, like that the 8% dividend was “guaranteed” or that the principal investment was “secured” or “safe”. Nothing could be further from the truth. At all times the GPB Funds were speculative, extremely high risk investments that were unsuitable for just about all investors.

If you were sold units in any GPB Capital Funds, please contact Stoltmann Law Offices, P.C. at 312-332-4200 for a free, no-obligation consultation with an experienced securities attorney. Our Chicago-based investor rights law firm offers representation nationwide on a contingency fee basis. That means if we do not recover any money for you, our services are free.


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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