The judgments and awards come after years of filing lawsuits and arbitration claims by GPB Capital investors.

For our latest posts related to GPB Capital, please click here.

Earlier this year, the SEC has charged GPB Capital, Ascendant Capital, and Ascendant Alternative Strategies with running a Ponzi-like scheme that raised roughly $1.8 billion from securities issued by GPB Capital. The SEC believes that as many as 17,000 retail investors nationwide have been defrauded.

GPB Capital had four flagship funds, which were sold as private placement offerings:

• GPB Holdings, LP / GPB Holdings Qualified, LP.
• GPB Automotive Portfolio, LP.
• GPB Holdings II, LP.
• GPB Waste Management, LP.

GPB Capital, an alternative asset management firm, sold unregistered and high commission limited partnership interests through independent broker-dealers and investment advisers who would, in turn, sell the GPB Funds to their retail investors. There are serious concerns that broker-dealers may have failed to conduct reasonable due diligence about the GPB Funds and GPB Capital.

Brokers and brokerage firms are obligated to make suitable recommendations in their customers’ best interests. Among other things, the broker must have a reasonable basis to believe that a recommendation is suitable for a customer based on the particular customer’s investment profile. In addition, the broker and firm must have a reasonable basis to believe, based on reasonable diligence, that the recommendation is suitable for at least some investors. FINRA has stated that “reasonable diligence” means that the firm’s and/or broker’s due diligence “must provide the firm or associated person with an understanding of the potential risks and rewards of the recommended security or strategy.”

Brokerage firms may have failed to conduct reasonable diligence into the GPB funds before selling the private placement offerings to their customers. The firms’ compliance departments likely ignored or missed many red flags such as inflated revenue reports, fabricated profits, kickbacks, and investor funds being funneled into the pockets of GPB’s principals.

Iorio Altamirano LLP is investigating claims on behalf of defrauded investors who were victims in the GPB funds scheme. The GPB funds were marketed to independent broker-dealers and investment advisers who would, in turn, sell the GPB funds to their retail investors.

Investors that have purchased any of the following private placement investments issued by GPB Capital should contact securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation and review of their legal rights:

• GPB Holdings, LP / GPB Holdings Qualified, LP.
• GPB Automotive Portfolio, LP.
• GPB Holdings II, LP.
• GPB Waste Management, LP.

If you lost money in the GPB funds, you might have a claim.

A Year of Awards for GPB Capital Investors

Below is a summary of cases that have been identified from publicly available records where investors filed securities arbitration claims seeking to recover investment losses due to, in part, private placement offerings of GPB Capital. The list includes only cases that have proceeded to a hearing. It does not include numerous cases that were settled.

How to Recover GBP Investment Losses

GPB Capital investors should immediately contact a securities arbitration law firm to review their legal rights.

Investors who have purchased GPB Automotive, GPB Holdings, GPB Holdings II, or GPB Waste Management through a broker or brokerage firm have successfully recovered investment losses by filing securities arbitration claims.

Iorio Altamirano LLP is a national securities arbitration law firm based in New York, NY. The law firm pursues FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.

We have nearly 20 years of combined experience as securities arbitration lawyers and have helped investors recover investment losses in over 1,000 cases. Our firm will file a FINRA securities arbitration claim on your behalf to recover your losses. We generally represent clients on a contingency fee basis. If we do not obtain a recovery, you do not owe us a legal fee.

Submit a form here to schedule a free and confidential consultation.

Iorio Altamirano LLP is investigating claims on behalf of GPB investors who purchased the security through a broker-dealer or registered investment advisor, including, but not limited to the following firms:

• Aegis Capital Corp.
• Aeon Capital Inc.
• American Capital Partners
• Arkadios Capital
• Ausdal Financial Partners, Inc.
• Avere Financial Group, LLC
• Axiom Capital Management, Inc
• BCG Securities, Inc.
• Cabot Lodge Securities LLC
• Calton & Associates, Inc.
• Capital Financial Services, Inc
• Capital Investment Group, Inc.
• Cascade Financial Management, Inc.
• Crystal Bay Securities, Inc.
• David A. Noyes & Company
• Dempsey Lord Smith, LLC
• Detalus Securities, LLC
• DFPG Investments, Inc.
• DH Hill Securities, LLLP
• Dinosaur Financial Group, L.L.C.
• Geneos Wealth Management, Inc.
• Emerson Equity LLC
• Financial West Group
• Great Point Capital LLC
• HighTower Securities, LLC
• IBN Financial Services, Inc.
• Innovation Partners, LLC
• International Assets Advisory, LLC
• Investment Architects, Inc.
• Kalos Capital, Inc.
• Kingsbury Capital, Inc.
• Landolt Securities, Inc.
• Lion Street Financial, LLC
• Lowell & Company, Inc.
• McDonald Partners LLC
• MML Investor Services
• Moloney Securities Co., Inc.
• Money Concepts Capital Corp
• MSC – BD, LLC
• National Securities Corporation
• Newbridge Securities Corporation
• Orchard Securities, LLC
• Pariter Securities, LLC
• Private Client Services, LLC
• Purshe Kaplan Sterling Investments
• Royal Alliance Associates, Inc.
• SagePoint Financial, Inc.
• Sandlapper Securities, LLC
• Silber Bennett Financial, Inc.
• Stephen A. Kohn & Associates, Ltd.
• Uhlmann Price Securities, LLC
• United Planners Financial Services
• Vanderbilt Securities, LLC
• Vestech Securities, Inc.
• Western International Securities, Inc.
• WestPark Capital, Inc.
• Whitehall-Parker Securities, Inc.
• Wilmington Capital Securities, LLC
• Woodbury Financial Services, Inc.

On July 1, 2021, Sanctuary Securities, Inc. and the Financial Industry Regulatory Authority (“FINRA”) entered into a Letter of Acceptance, Waiver, and Consent No. 20190606942201 (“AWC”) over allegations that between January 2014 and December 2018, Sanctuary Securities, Inc. failed to establish and maintain a supervisory system reasonably designed to achieve compliance with FINRA Rule 2111 in relation to the solicited sales of inverse and leveraged exchange-traded funds (collectively “Non-Traditional ETFs”) in that the firm’s supervisory system was not sufficiently tailored to address the unique features and risks of these products.

Relatedly, on July 2, 2021, FINRA suspended former Sanctuary Securities, Inc. financial advisor Stuart Pearl from the securities industry for three months. Click on the following link to read more: Stu Pearl, Former David A. Noyes & Company Broker, Suspended for Making Unsuitable Non-Traditional ETF Investment Recommendations – Indianapolis, IN

The FINRA AWC describes Non-Traditional ETFs as follows: “Non-Traditional ETFs are designed to return a multiple of an underlying index or benchmark, the inverse of that benchmark, or both, over only the course of one trading session — usually a single day. Non-Traditional ETFs typically rebalance their portfolios on a daily basis (also known as the daily reset). As a result, due to the effects of compounding of daily returns during the holding period, the performance of Non-Traditional ETFs over periods longer than a single trading session “can differ significantly from the performance … of their underlying index or benchmark during the same period of time.” Because of these risks and the complexity of the products, FINRA has advised its members that Non-Traditional ETFs “are typically not suitable for retail investors who plan to hold them for more than one trading session, particularly in volatile markets.”

According to the AWC, FINRA also alleged the following findings:

• From January 2017 through January 2019, the firm failed to review and evaluate the outside business activities of approximately 15 of its registered representatives, in violation of FINRA Rules 3270.01 and 2010.
• From January through December 2018, the firm distributed sales materials in connection with three private placement offerings that contained prohibited performance projections, in violation of FINRA Rules 2210(d)(1)(F) and 2010.
• From June 2018 through June 2019, the firm failed to file offering documents with FINRA related to eight private placements sold by the firm’s registered representatives, in violation of FINRA Rules 5123 and 2010.
• Between April and August 2019, the firm failed to terminate an offering of securities that did not meet a minimum contingency requirement under the terms of a private placement memorandum and return funds to investors, in contravention of Rule 10b-9 of the Securities Exchange Act of 1934. Therefore, the firm willfully violated Exchange Act Rule 10b-9 and FINRA Rule 2010.

As part of the AWC, Sanctuary Securities, Inc. was censured and agreed to a fine of $160,000. Sanctuary Securities, Inc. also agreed to pay over $370,000 in restitution to customers.

Sanctuary Securities, Inc. became a member of FINRA in December 1939 and was known as David A. Noyes & Company until March 5, 2020. The firm has 35 branch offices and approximately registered representatives.

If you have lost money with Sanctuary Securities, Inc., contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential consultation and review of your legal rights.

How to Recover Losses or Obtain a Free Consultation

A FINRA restitution order does not preclude investors from pursuing their own claims to seek restitution or other available remedies. Investors harmed by Sanctuary Securities, Inc.’s failures may have a claim against the firm.

If you have lost money with Sanctuary Securities, Inc., contact New York securities arbitration lawyer August Iorio of Iorio Altamirano LLP at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential consultation.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.

Sanctuary Securities, Inc. became a member of FINRA in December 1939 and was known as David A. Noyes & Company until March 5, 2020. The firm has 35 branch offices and approximately registered representatives. Iorio Altamirano LLP is also Sanctuary Securities, Inc. over inverse and leveraged exchange-traded funds supervisory failures. To read more about the investigation, click on the following link: Iorio Altamirano LLP Investigates Sanctuary Securities, Inc. (Formerly David A. Noyes & Company) Over Inverse and Leveraged Exchange-Traded Funds Supervisory Failures

Customers of Mr. Pearl or Sanctuary Securities, Inc./David A. Noyes & Company should consult with a securities arbitration law firm. If you or a loved one were a customer of Stuart Pearl, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential consultation.

Iorio Altamirano LLP represents investors nationwide that have disputes with their financial advisors or brokerage firms, such as David A. Noyes & Company.

FINRA Letter of Acceptance, Waiver, and Consent No. 2019060694202

FINRA and Mr. Pearl entered into a Letter of Acceptance, Waiver, and Consent No. 2019060694202 on July 1, 2021, after FINRA alleged that between March 2017 and August 2018, Mr. Pearl made unsuitable recommendations connected with leveraged and inverse exchange-traded funds. Specifically, FINRA alleged:

• Between March 2017 and August 2018, Mr. Pearl recommended nine Non-Traditional ETFs purchases to four of his customers at the firm.
• All of these transactions were solicited.
• The customers held these positions for periods ranging from about 100 to 600 days, with the average holding period approximately 400 days.
• These extended holding periods caused Mr. Pearl’s customers to incur approximately $80,000 in losses.
• Pearl failed to perform a reasonable basis suitability analysis of Non-Traditional ETFs to understand the unique features and specific risks associated with these products before offering them to his customers.
• In fact, the prospectuses for the Non-Traditional ETFs that Mr. Pearl recommended warned that the products were risky, intended to be utilized only by knowledgeable investors who understood the features of and risks associated with Non-Traditional ETFs, and should be actively and frequently monitored on a daily basis.
• Moreover, Mr. Pearl did not understand that losses in Non-Traditional ETFs are compounded because of how the valuations reset each day.
• Therefore, Pearl violated FINRA Rules 2111 and 2010.

The FINRA AWC describes Non-Traditional ETFs as follows: “Non-Traditional ETFs are designed to return a multiple of an underlying index or benchmark, the inverse of that benchmark, or both, over only the course of one trading session — usually a single day. Non-Traditional ETFs typically rebalance their portfolios on a daily basis (also known as the daily reset). As a result, due to the effects of compounding of daily returns during the holding period, the performance of Non-Traditional ETFs over periods longer than a single trading session “can differ significantly from the performance … of their underlying index or benchmark during the same period of time.” Because of these risks and the complexity of the products, FINRA has advised its members that Non-Traditional ETFs “are typically not suitable for retail investors who plan to hold them for more than one trading session, particularly in volatile markets.”

Financial Advisor Stuart L. Pearl (CRD No. 1500833)

Stuart Pearl, who is currently not registered with any broker-dealer, has 32 years of experience in the securities industry and has been associated with the following firms:

• David A. Noyes & Company in Indianapolis, IN, from July 2015 to April 2019.
• Ameriprise Financial Services, Inc. in Deerfield, IL, from June 2010 to July 2015.
• Morgan Stanley Smith Barney in Deerfield, IL, from June 2009 to June 2010.
• Citigroup Global Markets Inc. in Deerfield, IL, from April 2001 to June 2009.
• Merrill Lynch, Pierce, Fenner & Smith Incorporated in New York, NY, from May 196 to April 2001.

In June 2015, Mr. Pearl was terminated from Ameriprise Financial Services, Inc for allegedly violating company policy related to the use of discretion in non-discretionary accounts. Mr. Pearl denied any wrongdoing. However, in 2017, Mr. Pearl was suspended for 45 days by FINRA and fined $7,500 for the same alleged conduct. After an investigation, FINRA found that on May 14, 2015, Mr. Pearl used discretion to liquidate positions in six different securities on behalf of a senior customer. The findings also stated that Mr. Pearl made unsuitable recommendations in two customers’ joint brokerage account when he recommended that the customers use margin to execute several trades.

In March 2019, Mr. Pearl was “permitted to resign” from David A. Noyes & Company. In connection with the termination, David A. Noyes & Company stated that Mr. Pearl had not followed his heightened supervision plan and would have been terminated had he not resigned.

According to his public disclosure report with FINRA, Mr. Pearl has been the subject of at least five customer disputes, all of which alleged some form of unauthorized trading.

Unauthorized trading often occurs in non-discretionary accounts, where a customer retains discretion. In non-discretionary accounts, brokers must obtain a customer’s permission every time before placing a trade.

The following is a summary of the two most recent customer disputes:

• Customer Dispute (May 2020): A customer filed a written complaint alleging that Mr. Pearl created a margin trading account without the customer’s authorization. The matter was settled by David A. Noyes & Company for monetary compensation.
• Customer Dispute (March 2019): A customer filed a written complaint alleging that Mr. Pearl made an unauthorized trade, resulting in $85,000 in damages. Specifically, the customer alleged that Mr. Pearl put on a large hedge position in the customer’s account without the customer’s knowledge. David A. Noyes & Company settled the matter for monetary compensation.

David A. Noyes & Company – A Duty to Supervise

Financial institutions like David A. Noyes & Company must properly supervise financial advisors and customer accounts. Brokerage firms must establish and maintain a reasonably designed system to oversee account activity, such as suitable investment recommendations and unauthorized trading, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.

How to Recover Financial Losses or Obtain a Free Consultation

If you have suffered investment losses with Stu Pearl or David A. Noyes & Company or suspect other inappropriate activity occurred in your investment or retirement account, contact securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential review of your legal rights.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.