Securities Arbitration Lawyers BlogGPB-Selling Arete Wealth Management Ordered To Pay Investor $515k In FINRA Arbitration
A FINRA arbitration panel has awarded customers of Arete Wealth Management $515,000 for investment losses in risky GPB Capital Holdings private placements. The award is notable because Arete was ordered to pay $259,000 in client legal fees, which is not typical in FINRA arbitration awards.
Arete Wealth Management, a broker-dealer based in Chicago with 35 offices, is known to sell high-risk alternative investments. Silver Law Group filed a FINRA arbitration claim against Arete on behalf of an elderly client who we alleged was sold unsuitable leveraged ETNs, ETFs, and non-traded REITS. Among the investments that caused our client significant losses were: American Finance Trust, Hospitality Investors Trust, and Benefit Partners Realty Trust.
GPB Capital Holdings
FINRA arbitration claims have been piling up against GPB Capital Holdings, a New York-based alternative asset management firm that raised $1.8 billion since its founding in 2013 by Scientologist David Gentile.
GPB used dozens of broker-dealers across the country to sell private placements to investors. With the money raised, GPB bought companies such as auto dealerships and a waste management business.
Investors believed they would earn above-average returns from their investment, but they haven’t been paid distributions since 2018. GPB is being sued by investors and is accused of being a Ponzi scheme. Their chief compliance officer was indicted on obstruction of justice charges and multiple government agencies are investigating.
In 2019, GPB announced that the value of its funds were down significantly in value. Despite the bad news, investors have no choice but to hold the investment and risk further loss due to the illiquidity of the investment.
On February 4, 2021, a complaint filed by the SEC in U.S. District Court Eastern District of New York, alleged that David Gentile, CEO of GPB Capital, and Jeffry Schneider, owner of GPB’s placement agent Ascendant Capital, lied to investors about where the money used to pay 8% annual distribution payments to investors was coming from.
The complaint alleges that the defendants and Ascendant Alternative Strategies told investors that their distribution payments were coming entirely from profits from GPB’s companies, but that some of the money was coming from other investors, which is a Ponzi scheme.
Recovering GPB Losses
Silver Law Group has filed FINRA arbitration claims against multiple firms including SagePoint Financial, a broker-dealers that sold GPB private placements to investors. We also represent other investors in claims against Coastal Equities, Inc. and its broker Luke Johnson of Arizona for selling GPB and other illiquid investments.
Many claims to recover GPB losses for investors allege that the broker-dealers failed to conduct adequate due diligence into the investment.
The recent successful claim against Arete Wealth Management shows that investors can recover their losses in FINRA arbitration.
Contact Silver Law Group To Recover Your GPB Capital Losses
Silver Law Group is a nationally-recognized investment fraud and securities arbitration law firm with extensive experience recovering losses for investors through FINRA arbitration and in court. Our GPB attorneys have filed FINRA arbitration claims in multiple states.
Scott Silver is the chairman of the Securities and Financial Fraud Group of the American Association of Justice and represents investors nationwide and abroad in securities and investment fraud cases. Contact Scott Silver for a no-cost consultation to discuss your options at ssilver@silverlaw.com or toll free at (800) 975-4345.