An insight into the GPB Capital Investigation

An insight into the GPB Capital Investigation

GPB Capital Investigation firm issued investments but now it is under the CBI probe and is facing investigations by multiple regulators such as FINRA, SEC, and many others. Additionally, several investors have filed or are considering a lawsuit against the company. Several investors who have purchased GPB investments depended on the recommendation of financial advisors or brokers of GPB, who have told them to be income-producing investments. But, many investors these days receive notices that the shares prices have dropped. The brokers who have sold these investments have received commissions.

Several investors were not aware of the fact that the financial advisors and brokers of GPB capital investments were motivated to sell the investments because they received a higher commission.  The brokers received a high commission but the investment was not suitable for the investors. The investors relied on financial advisors who owed them a fiduciary duty because they put the interest of the clients before their own interests. Financial advisors have regulatory and legal responsibilities to follow the rules as well as the regulations of the investment industry. Those who had recommended GPB investments have a responsibility of monitoring the investments. As these were not done, clients suffered huge losses on their investments.

Due Diligence

Besides fund monitoring, financial advisors and brokers have an added responsibility; the responsibility of conducting due diligence. This process involves a primary investigation into GPB investments and it includes potential risks, benefits, tax consequences, the company’s history along with the main individuals and many other relevant factors. Appropriate due diligence can locate issues related to investors that include high costs, illiquidity, high commissions, and interest conflicts that can make an investment unsuitable for the investors. There can be issues whether or not the files were updated properly including those papers that were made public.

Investigation of GPB Capital Holdings

The firm, GPB Capital represents several clients, to whom the brokers of GPB Capital have recommended the scheme. The brokers were paid huge commissions for selling the investments. The company has been facing several issues since the time it has stopped raising additional money. According to many lawyers, this investment is similar to a manipulative and a complicated Ponzi scheme. It was also reported that FINRA or the Financial Industry Regulatory Authority and SEC or the Securities and Exchange Commission have initiated an investigation into this scheme. It is also being investigated by the FBI, and all these factors have brought in a lot of relief for the customers.



Frances Bailey