After GPB failed to produce required audited financial statements, a series of investigations and lawsuits ensued:
April 2018: GPB failed to produce audited financial statements
August 2018: GPB Announced no new investor capital would be accepted
September 2018: Massachusetts Division of Securities launched investigation
November 2018: GPB’s auditor resigned, citing perceived risks
February 2019: FINRA and SEC launched investigations into broker-dealers that sold GPB
June 2019: GPB Capital allegedly 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 allegedly reported declines in estimated value ranging from 25% to 73%. Following the announcement, Fidelity Investments allegedly instructed its broker-dealer clients to remove GPB Capital-issued private placements from the Fidelity platform within 90 days.
July 2019: Class action lawsuit filed on behalf of investors against GPB Capital Holdings
August 2019: David Rosenberg, a principal of a private company and one of GPB’s business partners, Prime Automotive Group in Massachusetts, is also accusing GPB in publicly-available court papers of financial misconduct and running a “Ponzi-like scheme”.
September 2019: Once again, GPB delays release of audited financial statements.
September 2019: David Rosenberg is fired as CEO of Prime Automotive, following Rosenberg’s accusations of financial misconduct against GPB.
October 2019: Michael S. Cohn, Managing Director and Chief Compliance Officer of GPB Capital Holdings, LLC (GPB), charged with obstruction of justice, unauthorized computer access and unauthorized disclosure of confidential information.
November 2019: Our clients have received notice that National Financial Services LLC, a company which provides clearing, custody, and other related services on behalf of National Securities Corp., will no longer support the custody of GPB Automotive Portfolio LP CL A.
November 2019: In letters to investors, GPB announced that it will not be meeting a commitment to provide investors with audited financials for two of its funds by year-end. In addition, the Audit Committee has elected to resign effective upon the earlier date of the completion of the Rosenberg investigation or by November 27, 2019.
November 2019: Updates on GPB funds sent to us by one of our clients. Here is a summary of the updates:
Armada Waste Management: 2Q 2019 Fair Market Value is $33.3 million, or 20.5% of the Net Capital Contributions, a decline from 4Q 2018 Fair Market Value of $53.4 million, or 32.7% of the Net Capital Contributions. The current unrealized loss is $92,725,188.00. The primary cause of the decline is the continued struggles of Armada’s New York and Massachusetts platforms.
GPB Automotive Portfolio, LP: 2Q 2019 Fair Market Value is $393.5 million, or 58.5% of the Net Capital Contributions, a decline from 4Q 2018 Fair Market Value of $410.2 million, or 60.9% of the Net Capital Contributions. The current unrealized loss is $80,590,272.00.
GPB Cold Storage, LP: 2Q 2019 Fair Market Value is $36.8 million, or 64.4% of the Net Capital Contributions, a decline from 4Q 2018 Fair Market Value of $37.4 million, or 65.6% of the Net Capital Contributions. This update did not include financials to show the unrealized loss.
GPB Holdings II, LP: 2Q 2019 Fair Market Value is $497.8 million, or 73.2% of the Net Capital Contributions, a decline from 4Q 2018 Fair Market Value of $507.3 million, or 74.6% of the Net Capital Contributions. The current unrealized loss is $73,486,085.00.
GPB NYC Development Holdings, LP: 2Q 2019 Fair Market Value is $19.0 million, or 59.7% of the Net Capital Contributions, a decline from 4Q 2018 Fair Market Value of $20.0 million, or 62.8% of the Net Capital Contributions. This update did not include financials to show the unrealized loss.
January 2020: According to Investment News, in a letter to investors dated Jan. 23, GPB Capital said it would not be able to issue Schedule K-1 tax documents for GPB Automotive Portfolio before tax day. GPB Automotive was one of the company’s two largest funds, with $622.1 million raised and $52.2 million paid in commissions to brokers who sold the product, according to filings with the Securities and Exchange Commission.
February 2020: According to Investment News, Volkswagen of America Inc. filed an amended complaint against GPB Capital, alleging that GPB broke an agreement with Volkswagen in September when it removed David Rosenberg from his position as the head of three auto dealerships.
March 2020: GPB announces that the auditors will resume audit work on or about the start of April 2020. However, GPB does not provide an anticipated completion date for the audit originally due in April 2018, almost TWO YEARS ago.
June 2020: State of Massachusetts Filed a Fraud Complaint Against GPB Capital Holdings with regulators saying the firm made false statements to roughly 180 investors who put more than $14 million in its private-equity funds.
September 2020: Michael Cohn, 61, former chief compliance officer at GPB Capital Holdings, was charged in February 2019 with stealing information about a probe into New York-based GPB while he was still working for the SEC as a compliance examiner. Cohn pled guilty to theft of government property before U.S. District Judge Gary Brown in Central Islip, New York.
October 2020: Very disappointing GPB update on the performance of GPB investments. Would NOT discuss valuations, future distributions or legal & regulatory issues. GPB would not even estimate when audits will be completed. Stated that between March 2020 and September 2020, the drop in GPB Waste Management’s business has been 20%. Did not answer any questions.
February 2021: The State of New York has filed a lawsuit against GPB Capital Holdings, David Gentile, Jeffry Schneider, Ascendant Capital, LLC, Ascendant Alternative Strategies, LLC, and Jeffrey Lash.
February 2021: The Securities and Exchange Commission charged three individuals and their affiliated entities with running a Ponzi-like scheme that raised over $1.7 billion from securities issued by a New York-based asset management firm and registered investment adviser, GPB Capital. The SEC also charged GPB Capital with violating the whistleblower protection laws.
February 2021: New York federal judge ordered an independent monitor to take over GPB Capital Holdings LLC. GPB Capital Agrees to SEC Monitor.
