GPB Capital Holdings - Investor Alert

GPB Capital Holdings is an alternative asset management firm focusing on acquiring income-producing private companies in various industries, particularly the automotive retail sector.  GPB Capital Holdings, the issuer of high risk and high-commission private placements, includes the following funds:

  • GPB Cold Storage
  • GPB Automotive Fund
  • GPB Automotive Income
  • GPB Holdings II and III
  • GPB Waste Management
  • GPB NY Development

GPB Capital Holdings, with 1.8 billion in investor funds, has stopped raising investor money while it seeks to straighten out issues related to the accounting and financial statements of two of its biggest funds, the GPB Automotive Portfolio and the GPB Holdings II. GPB Capital Holdings halted its fund raising efforts after it missed its April 2018 deadline to file financial statements for these two funds with the Securities and Exchange Commission. GPB Capital Holdings has also suspended all redemptions of investor funds.  

According to public reports, the sales of these two funds allegedly resulted in broker-dealers receiving approximately $100 million in commissions since 2013 for marketing the products to their retail clients, earning almost 8% in commissions on those sales.  Over 60 brokerage firms have sold the funds, including Advisor Group broker-dealers Royal Alliance Associates Inc., Sagepoint Financial Inc, FSC Securities Corp. and Woodbury Financial Services Inc.

In September 2018, securities regulators in Massachusetts disclosed that they had opened an investigation into the sales practice of up to 63 independent broker-dealers who had reportedly offered private placement investments in various GPB funds. Broker-dealers are required to perform adequate due diligence on all such private placements before selling them to their clients. Furthermore, they must ensure that each investment is suitable for the investor in light of the investor’s financial situation, investment objectives and risk tolerance. As private placements, the various GPB funds are very complex and risky investments which are not typically suitable for most average, retail investors.

Gregory B. Simon Law, LLC is a national securities law firm that provides legal services to investors and financial advisors on a wide range of financial industry matters.  For more information on the firm, please visit https://www.gregsimonlaw.com.

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