If you have lost money in the stock market due to fraud, misrepresentation, negligence, or for other reasons, we can help you. We have successfully recovered over $250 million in FINRA securities arbitrations.*
Need Legal Help? Contact Us. Call +1 (888) 997-9956
The Securities Law Firm of KlaymanToskes (https://klamantoskes.wpengine.com) announced today that it is investigating the sales practices and due diligence of Financial Industry Regulatory Authority (“FINRA”) broker-dealers who solicited customers to purchase private placement securities of GPB Capital Holdings (“GPB”) in the form of notes.
Under FINRA Rules, brokerage firms have an obligation to make suitable recommendations to their customers. They must also conduct adequate due diligence of facts concerning the risks associated with the investments. More than 60 broker-dealers sold GPB funds, including Royal Alliance Associates Inc., Sagepoint Financial Inc., FSC Securities Corp., and Woodbury Financial Services Inc. Furthermore, the notes that were sold are considered private placement, or non-traditional, investments that are not registered with the SEC. The nature of these investments makes them riskier. They are often only suitable for sophisticated, speculative investors. Yet, brokerage firms and financial advisors still sell these products because they offer higher commissions.
According to an August 2018 news report, GPB notified investors that they should no longer rely on 2015 and 2016 financial statements and independent accounts’ reports. The CEO of GPB, David Gentile, disclosed that “certain material weaknesses in internal controls exist,” causing inaccuracies in the timing and amounts of income recognition. This disclosure followed an internal accounting review that was conducted by GPB, freezing monthly interest payments.
The sole purpose of this release is to investigate on behalf of our clients who purchased these notes. Investors who have information about the sales practices regarding the presentation and sale of these notes are encouraged to contact Lawrence L. Klayman, Esq. of KlaymanToskes at (888) 997-9956, or visit our website at www.klaymantoskes.com.