As we previously reported, the SEC, FINRA, the FBI, and the State of Massachusetts are investigating GPB Capital Holdings LLC (“GPB”) related to the accuracy of GPB’s disclosures of financial information to its investors. GPB, a New York asset management firm, focused on private placement investments, has been under investigation since September 2018. On October 23, 2019, GPB’s legal problems continued as the U.S. Department of Justice charged Michael Cohn, Chief Compliance Officer of GPB, with Obstruction of Justice related to the SEC investigation. Mr. Cohn, who up until October 2018 worked at the SEC as an examiner, allegedly reviewed and took with him unauthorized significant and comprising information related to the SEC’s GPB investigation when he left the SEC to work for GPB. Additionally, throughout his tenure at GPB, Mr. Cohn allegedly would brag about his inside knowledge of the SEC GPB investigation to senior members of GPB.
GPB and the broker-dealers that sold it to their clients have weathered a storm of bad news over the past year. Public records show there are at least 80 broker-dealers that sold, or were authorized to sell investments for GPB. As registered broker-dealers selling private placements, these companies were required to conduct their due diligence in investigating potential investments and making sure their clients understand the risks associated with each potential investment before investing their clients’ money in the investment.
The list of broker-dealers who sold or were authorized to sell GPB securities includes: