GPB Capital Is Accused of Role in $1.7 Billion Fraud Scheme

February 9, 2021 Author: Brian Levin

Thousands of Investors Have Been Affected by GPB “Ponzi-like” Scheme

The U.S. Securities and Exchange Commission has charged GPB Capital Holdings, LLC; Ascendant Capital, LLC; Ascendant Alternative Strategies, LLC, and three individuals associated with these entities for connection to an over $1.7 billion “ponzi-like” scheme. 

If your financial advisor, stockbroker, or banker recommended that you purchase shares of a GPB Capital fund investments, contact Levin Law, P.A. for a free consultation. Levin Law has been investigating GPB related fraud for years and recently obtained a $500k+ award against a brokerage firm that recommended GPB private placements funds to Levin Law clients.  That result was the first FINRA arbitration award in the country regarding GPB Capital investments. 

“Long-running and Multi-Faceted Fraudulent Scheme”

The SEC Complaint against GPB Capital and others indicates that the asset management firm engaged in a “long-running and multi-faceted fraudulent scheme” that could defraud thousands of investors out of over $1.7 billion. GPB Capital Holdings, LLC was founded in 2013, raising money quickly in risky, high-commission private placements. Their “portfolio companies” included investment in waste management, automotive retail, and health care businesses. 

As noted by Bloomberg, over 17,000 investors including 4,000 seniors are believed to be involved and may suffer substantial losses. The complaint indicates that nearly all of the funds raised by GPB Capital (over $1.7 billion) is still at risk. Federal prosecutors allege that despite displaying an “aura of success” investigators allege that it was all an illusion. GPB is accused of using investor funds to cover monthly distributions to investors, numerous securities law violations, and breaching whistleblower protection laws. 

Additionally, individuals charged in the complaint are charged with manipulating financial statements, making material misrepresentations and omissions, deceptive marketing practices, failure to disclose inherent conflicts of interest, and securities fraud.

State and Federal Investigations Against GPB

GPB Capital as well as individuals and brokerage firms that recommended or sold GPB fund investments have been the subject of numerous state and federal investigations. Multiple states have filed separate lawsuits against GPB and its executives. 

It is believed that executives misappropriated GPB funds for personal use. According to Bloomberg, funds were used to “subsidize private planes and luxury travel.” Money also allegedly went to “personal bank accounts and to family members.”

Red Flags to Investors

Red flags were raised nearly three years ago when the company failed to make required financial records public. That same year GPB Capital suspended all redemptions and distributions. Shortly thereafter, the fund’s internal audit committee resigned citing that “perceived risks” fell outside their “internal risk tolerance parameters.”  Since then, GPB Capital has routinely failed to submit or release audited financial statements. 

Now, it is believed that the company’s assets are substantially less than what is owed to investors. If proven true, the fraud scheme would be the largest targeting individual investors since Bernie Madoff and Allen Stanford.

Contact Levin Law for a Free Case Evaluation

If you invested with a GPB Capital fund, contact Levin Law immediately. Founder and managing partner, Brian Levin has recently secured an over $500,000 award against a brokerage firm that recommended GPB private placement funds to customers. Call (305) 402-9050 or contact@levinlawpa.com to discuss your legal options. 

Levin Law accepts cases on a contingency fee basis, meaning clients are not responsible for Levin Law attorney fees unless money is recovered on their behalf.

About Levin Law

Levin Law is a premier national securities and class action law firm with significant experience. Brian Levin, Levin Law’s founding attorney, has helped recover in excess of $100,000,000 through securities arbitration and litigation for individual and institutional investors throughout the country and the rest of the world. Levin Law represents retirees, individual investors, high-net-worth investors, ultra-high-net-worth investors, institutions, family offices, trusts, publicly held companies, and others.

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