On February 4, 2021, the North American Securities Administrators Association (NASAA) announced that regulatory actions have been filed against New York-based investment adviser, GPB Capital Holdings, LLC (GPB), by seven State securities agencies in connection with an alleged $1.8 billion Ponzi-like scheme which has impacted approximately 17,000 investors nationwide. Specifically, NASAA announced the initiation of civil complaints by state securities regulators in Alabama, New Jersey and New York against GPB, broker-dealer Ascendant Alternative Strategies, LLC (Ascendant), as well as certain named individuals, including David Gentile, Jeffry Schneider, and Jeffrey Lash.

These civil complaints generally allege violations of applicable state securities statutes in a purported scheme to defraud investors who purchased securities in various limited partnership investment vehicles offered and controlled by GPB. In addition to these civil complaints, securities regulators in Georgia, Illinois, Missouri and South Carolina initiated simultaneous administrative proceedings against GPB. Together, these proceedings by state securities regulators come on the heels of recent action undertaken by the Securities and Exchange Commission (SEC) against GPB.

GPB, formed by Mr. David Gentile in 2013, is an alternative asset management firm based in New York, New York. The Company was focused on the acquisition of income-producing private companies, primarily in the automotive and waste management sectors. The Company originally raised about $1.8 billion in investor equity. GPB’s funds were made available to investors though minimally regulated private placements under SEC Regulation D, utilizing numerous broker-dealers nationwide to sell private placement investments in various GPB funds.

Investors in GPB funds may have recourse to recover their losses through securities arbitration before FINRA. Specifically, investors may be able to file arbitration claims against their financial advisor, as well as his or her brokerage firm, that were involved in recommending the sale of highly risky and complex private placement investments in certain GPB funds. Private placements are unregistered securities that are often accompanied by a private placement memorandum (PPM) or other offering documents that typically contain only extremely limited information as to the investment’s financials and risk factors.

Brokerage firms, and by extension their financial advisors, are legally obligated to perform adequate due diligence on any investment recommended to customers, including private placements offered under Regulation D. Furthermore, brokers and other financial advisors have a duty to disclose the risks associated with such an investment, as well as to conduct a suitability analysis to determine if the investment meets an investor’s stated investment objectives and risk profile.

If you have invested in any of the GPB funds and have suffered losses or are unable to exit your illiquid investment position and wish to learn more about your legal rights, you may contact us by telephone at (201) 771-1115 or by email atinfo@gialawgroup.com for a no-cost, confidential consultation. The attorneys at Giarrusso Law Group LLC have significant experience working closely with investors in complex and illiquid investments, including private placement offerings, to recover investment losses through securities arbitration before FINRA. Please note that claims against brokers or broker-dealers relating to the sale of GPB funds may be made independent of your concurrent involvement in any ongoing class action claims against GPB.