- March 22, 2019
-- Investment fraud attorney Joe Wojciechowski filed a Statement of Claim with FINRA Dispute Resolution on behalf of an investor who was solicited by her Financial Advisor to invest her IRA money in the GPB Automotive Fund, L.P. The claim also includes investments in several Real Estate Investment Trusts (REITs) issued by American Realty Capital (ARC). The claim includes allegations that the brokerage firm failed to 1) perform adequate due diligence in the GPB Automotive Fund and ignored red flags about the offering so that the firm could pocket a 10% commission for selling the investment; 2) that the financial advisor and firm ignored our client's objectives, risk tolerance, and financial acumen in concentrating approximately 90% of her retirement account in the GBP Automotive Fund and ARC REITs; that the brokerage firm failed to adequately supervise the conduct of this financial advisor, who had upwards of twenty customer complaints on his record prior to the solicitations at issue; and 4) that these investments were sold to our client based on fundamental misrepresentations and omissions in violation of both state securities and consumer protection statutes.
Chicago-based securities fraud attorney Joe Wojciechowski (http://www.stoltmannlaw.com
) stated about this claim that "Brokerage firms have an iron-clad responsibility, rooted in FINRA Rule 2111, the 'suitability rule,' to perform due diligence on a private placement like GPB Automotive Fund. This is a gatekeeper function designed to ensure a private placement is suitable for at least some investors. Our investigation reveals that brokerage firms regularly 'check the boxes' in the due diligence process because of the conflict of interest between the firm and their clients: if the firm rejects the offering, they can't collect their 10% commission."
The GPB Capital funds have been the subject of a cascading array of bad news over the past few months. This news includes large scale regulatory investigations by the Commonwealth of Massachusetts, a visit to GPB by the FBI and New York City Business Integrity Commission, inquiries by FINRA and the SEC, amongst other disconcerting developments. All of these investigations center on the GPB Funds, which allegedly raised over $1.5 billion from investors via private offerings through a network of retail brokerage firms like NewBridge Securities, FSC Securities, Cetera Advisors, Royal Alliance, Uhlmann Price, and many others. At a 10% commission rate, these brokerage firms generated approximately $150 million in revenue just from selling these speculative and opaque funds.
If you were sold investments in any of the GPB Capital offerings by your financial advisor and wish to know your legal options, please call 312-332-4200 for a no obligation free consultation with an attorney. Joe Wojciechowski is a Chicago-based contingency fee attorney, which means we do not get paid until you do.