GPB Capital fraud lawyer

Advisor Marc Linsky Accused of Recommending GPB Capital

May 15, 2020 | by Staff Attorney

Advisor Marc Linsky (Linsky), currently employed by ProEquities, Inc. (ProEquities) has been subject to at least one customer complaint during the course of his career. According to a BrokerCheck report one of the customer complaints appears to concern fraudulent GPB Capital Holdings (GPB Capital) related investments.

GPB Capital is facing multiple accusations of being a Ponzi scheme, an ongoing U.S. Securities and Exchange Commission (SEC) and FBI investigations, and even GPB’s chief compliance officier being indicted for illegally obtaining information on the SEC’s investigation. Now even Volkswagen and Toyota are threatening to pull the plug on GPB Capital auto dealerships. While advisors have been telling investors to do absolutely nothing and just hang in there – this is nothing more than just additional poor advice. In November 2019 GPB Capital’s admitted that no financial audit would occur anytime in the near future. The firm has admitted that it has never been profitable and has merely returned investor capital in the past in order to fake a successful business model. In sum, investors now know there is nothing to hang onto. By the day, advisor recommendations to do nothing appear to be completely self-serving, out of the loop, and not in the interest of the investor.

In January 2020 a customer complained that Linsky violated the securities laws by alleging that Linsky engaged in sales practice violations related to negligence, breach of fiduciary duty, violation of Pennsylvania Securities Act, violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, and breach of contract in relation to investment recommendation in GPB Auto made by representative in October of 2016. The claim alleges $80,000 in damages and is currently pending.

Our firm has analyzed the GPB Capital offerings and believe that brokerage firms did not review GPB Capital offerings in any significant detail. Any serious due diligence would have revealed that GPB Capital was a dubious offering destined to fail. In complaints filed with The Financial Industry Regulatory Authority (FINRA) our clients have alleged that GPB Capital’s scam was highly predictable and easy to spot. Nearly every aspect of the offering raised unanswerable questions from GPB Capital’s senior management, fantastical business claims, and intra-fund lending practices.

Advisors Beg Clients to Wait it Out While GPB Capital Collapses

December 16, 2019 | by Staff Attorney

Our firm has been contacted by hundreds of clients that have been defrauded in GPB Capital Holdings (GPB Capital) related investments. One common element in our firm’s contact with GPB Capital investors is the advisor’s recommendation to victims – do absolutely nothing. The advisors recommendation is expressed in phrases like “the audits will come out”, “GPB Capital is a completely transparent company and not a scam”, and sometimes “just hang in there.”

However, in November GPB Capital’s patience game crumbled and the firm admitted that no financial audit would occur anytime in the near future. In sum, investors now know there is nothing to hang onto. Advisors have no counter talking points to weigh against multiple accusations of being a Ponzi scheme, the ongoing U.S. Securities and Exchange Commission (SEC) and FBI investigations, and even GPB’s chief compliance officer being indicted for illegally obtaining information on the SEC’s investigation. Now even Volkswagen and Toyota are threatening to pull the plug on GPB Capital auto dealerships. By the day, advisor recommendations to do nothing appear to be completely self-serving, out of the loop, and not in the interest of the investor.

Our firm has analyzed the GPB Capital offerings and believe that brokerage firms did not review GPB Capital offerings in any significant detail. Any serious due diligence would have revealed that GPB Capital was a dubious offering destined to fail. In complaints filed with The Financial Industry Regulatory Authority (FINRA) our clients have alleged that GPB Capital’s scam was highly predictable and easy to spot. Nearly every aspect of the offering raised unanswerable questions from GPB Capital’s senior management, fantastical business claims, and intra-fund lending practices.

Private Placement Recovery Options – Investment Attorney

June 19, 2019 | by Staff Attorney

At Gana Weinstein LLP, we often hear from investors who were recommended by their advisors to purchase high risk private placement investments and suffered substantial – often crushing losses as a result. Our firm regularly represents these investors in disputes with the advisors and brokers who sold these products without adequate disclosure. Brokers have a responsibility to conduct due diligence on all private placement offerings. Due diligence includes an investigation into the investment’s properties including its benefits, risks, tax consequences, issuer, history, and other relevant factors.

Private placements are bond, equity, or other debt instruments issued in reliance on a statutory or rule-based exemption from the registration requirements administered by the (SEC). The private placement industry was created based upon the reasoning that exempting private placements from registration is appropriate where purchasers have the economic ability, sophistication, and the professional advice necessary to do without the regular protection afforded by the disclosures required through registration. According to sources, a total of $33.5 billion was raised in 647 transactions through the third quarter of 2018.

Recently FINRA put out an announcement that called out the shortcomings it observed in the industry when it comes to due diligence. FINRA found that firms “failed to conduct reasonable diligence on private placements and failed to meet their supervisory requirements.” FINRA stated that firms that performed “reasonable diligence conducted meaningful, independent research on material aspects of the offering; identified any red flags with the offering or the issuer; and addressed and resolved concerns that would be relevant to a potential investor.” Firms should have a due diligence process such as “creating a due diligence committee (at larger firms) or otherwise formally designating one or more qualified persons (at smaller firms), and charging them with investigating and determining whether to approve the offering for sale to investors.” The crucial ingredient is for “firms independently verified information that was key to the performance of the offering…”