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GPB CAPITAL LAWSUIT – Investor Fraud Alert – Berger Montague Announces Securities Fraud Investigation Into GPB Capital Holdings

DATE: August 6, 2019

August 6, 2019. PHILADELPHIA – Berger Montague is investigating alleged wrongdoing and potential fraud at GPB Capital Holdings, LLC (“GPB Capital”) and its limited partnership funds, as well as David Gentile, its founder and Chief Executive Officer; William Jacoby, its Chief Financial Officer; Roger Anscher, its Chief Operating Officer and General Counsel; and Michael Cohn, its Chief Compliance Officer.

GPB Capital describes itself as a “New York-based alternative asset management firm that seeks to acquire income-producing private companies.” The Company raised more than $1.5 billion in capital held in private limited partnerships that invest primarily in auto dealerships and waste management businesses. Interests in GPB funds were sold through independent broker-dealers, including Arkadios Capital; FSC Securities Corp; Royal Alliance Associates, Inc.; Sagepoint Financial Inc.; and Woodbury Financial Services, Inc.

Beginning in April 2018, GPB Capital has faced increasing scrutiny from its investors and regulators regarding its accounting and the value of its private placements. The Company has failed to file required registration forms and make critical financial disclosures with the SEC for its two largest funds, GPB Holdings II ($645.8 million) and GPB Automotive Portfolio ($622.1 million) for over a year. The Company claims it is performing an audit of its assets and that it will have to restate 2015 and 2016 financials for certain funds in connection with its accounting review. However, the Company also disclosed in November 2018 that its auditor, Crowe LLP, had resigned. The auditor allegedly refused to provide a clean audit opinion due to undisclosed related-party transactions and other irregularities uncovered in the Company’s books and records. GPB Capital is also the subject of investigations by the SEC, the FBI, the Financial Regulatory Authority (“FINRA”), and Massachusetts and New York regulators.

On June 21, 2019, GPB Capital reported significant losses in the value of GPB Holdings II and GPB Automotive Portfolio, which declined more than 25% and 39%, respectively. GPB’s other funds reported declines in estimated value ranging from 25% to 73%. Following the announcement, Fidelity Investments instructed its broker-dealer clients to remove GPB Capital-issued private placements from the Fidelity platform within 90 days. The GPB Capital funds are listed below:

  1. GPB Automotive Portfolio, LP
  2. GPB Cold Storage LP
  3. GPB Eurobond Finance PLC
  4. GPB Holdings II, LP
  5. GPB Holdings III, LP
  6. GPB Holdings Qualified, LP
  7. GPB Holdings, LP
  8. GPB NYC Development, LP
  9. GPB Scientific, LLC
  10. GPB Waste Management, LP (formerly: GPB Waste Management Fund, LP)

If you are an investor in any of the GPB Capital funds, please contact Berger Montague’s investigating attorneys, Michael Dell’Angelo and Benjamin Galdston, at 800-424-6690, 215-875-3080 or 858-539-9767, or via email at mdellangelo@bm.net and bgaldston@bm.net.

Berger Montague is a nationally recognized, full-service plaintiffs’ class action law firm specializing in securities, antitrust and other complex litigation on behalf of institutions and other investor and individual plaintiffs. Attorney advertising. Prior results do not guarantee similar outcomes.

Contacts

Michael Dell’Angelo
Managing Shareholder
Berger Montague
215-875-3080
mdellangelo@bm.net

Benjamin Galdston
Shareholder
Berger Montague
858-539-9767
bgaldston@bm.net

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