SEC Secures Receiver for GPB Capital Holdings Following Alleged Deceptive Practices

Posted on January 10th, 2024 at 2:20 PM
SEC Secures Receiver for GPB Capital Holdings Following Alleged Deceptive Practices

From the desk of Jim Eccleston at Eccleston Law 

The U.S. District Court for the Eastern District of New York approved the SEC's request to transition the ongoing monitorship over GPB Capital Holdings, LLC and its affiliates into a receivership.

The SEC's complaint alleged that David Gentile, GPB Capital's owner and CEO, and Jeffry Schneider, owner of GPB Capital's placement agent Ascendant Capital, deceived investors about the source of funds used for annualized distribution payments. The complaint claimed that GPB Capital used investor funds to make those payments, falsely portraying them as originating from the portfolio companies.

The SEC's complaint charged Gentile, Schneider, GPB Capital, Ascendant Alternative Strategies, Ascendant Capital, and Jeffrey Lash with various violations. The charges included antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, aiding and abetting certain violations and violations of the Investment Advisers Act of 1940. The SEC sought disgorgement of ill-gotten gains, prejudgment interest, and penalties.

The court's decision converted the monitorship into a receivership, appointing Joseph T. Gardemal III as the receiver for GPB Capital and its affiliated entities. The court's order requires the receiver to provide an accounting of receivership assets and propose a plan for asset distribution to investors within 45 days.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, sec

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