23 Oct Obstruction of justice in another chapter of GPB Capital news making headlines
Investment News’ Bruce Kelly reports that GPB Capital’s chief compliance officer has been charged with obstruction of justice. This comes after a series of problems that continue to undermine GPB’s reputation and shine a light on why brokers who sold GPB are facing investor complaints.
GPB Capital Holdings first made headlines in 2017 when it entered litigation against a former business partner. Since then, many problems have surfaced, and investors have been watching the stories unfold with growing insecurity. Now, the Department of Justice has sent out a press release informing that Michael S. Cohn, Managing Director and Chief Compliance Officer of GPB, has been indicted for obstruction of justice, unauthorized computer access and unauthorized disclosure of confidential information.
The Department of Justice is not the first one to turn its attention to GPB. Earlier this year, the FBI and the New York City Business Integrity Commission made an unannounced visit to the firm’s NY office, and FINRA (Financial Industry Regulatory Authority) and SEC (Securities and Exchange Commission) launched investigations intro broker-dealers that sold GPB.
Obstruction of justice: Michael Cohn and GPB Capital
Now, according to Bruce Kelly, “Michael Cohn allegedly stole information from the SEC before he started working for GPB in October 2018.”
“About a year ago, he left the SEC to join GPB, an alternative asset management firm.
Prior to leaving the SEC, Mr. Cohn allegedly accessed information on SEC servers relating to an Enforcement Division investigation into GPB, the indictment alleges.
He was not authorized to access this material, which included confidential information, privileged attorney-client work product and contacts with law enforcement and other regulatory agencies, according to the indictment.
During discussions with GPB personnel about obtaining a job there, Mr. Cohn allegedly advised them that he had inside information about the SEC’s investigation, and on several occasions he disclosed information to members of GPB’s senior management about that investigation.”
Understanding the GPB Capital Lawsuits
More than 60 brokerage firms were authorized to sell GPB Capital Funds. Despite the fact that brokers licensed by FINRA are required to follow rules, laws, and regulations when recommending the purchase or sale of a security, investors were pitched GPB. Brokers motivated by 8-12% commission received more than $100 million.
Patrick Dibre, former GPB Capital Holdings partner, alleged that “losses occasioned by GPB were in fact caused by a very complicated and manipulative Ponzi scheme.”
To learn more about the investors’ complaints, click here.
To read Investment News full story, click here.
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