The US Securities and Exchange Commission charged investment adviser GPB Capital Holdings and three executives this week with defrauding over 17,000 retail investors in a Ponzi-like scheme that raised over $1.7 billion.
Q4 2020 hedge fund letters, conferences and more
SEC Claims GPB Capital Is A Ponzi Scheme
Thomas Gorman is a partner at the international law firm Dorsey Whitney, and is one of the country's pre-eminent experts on SEC enforcement and insider trading. Mr. Gorman is author of the popular SEC Actions Blog, served for seven years in key positions at the Securities & Exchange Commission including Senior Counsel in the Division of Enforcement. Of this he says,
"No matter how many times it has been said, it is never enough: Be careful where you invest your funds. Knowing the person, looking at the returns, reviewing the PR is never enough. It takes work – a long, hard review of the entire operation to be sure, and even then mistakes get made. GPB Capital, a New York fund, is just the latest example. Many folks thought this was an established fund. Many put their money in. Now the Department of Justice and the Securities and Exchange Commission claim it is a Ponzi scheme. The company disagrees and is cooperating ,according to a press release, with the authorities. Perhaps. But the clear point is this fund apparently had some significant financial issues; the clear fact is many people may lose their money or have it tied up for years. The clear point is that with better due diligence many of those investors may have avoided these agonies. Be careful out there," Gorman says.
