Another Ponzi – $1.7 billion and 17,000 investors

The has just charged GPB and its three managers of running a complex $1.7 bn ponzi scheme, which defrauded 17,000 investors, 4,000 of them seniors. The managers, David Gentile, Jeffrey Lash and Jeffry Schneider, were living large – properties, luxury travels, trips, planes and Ferraris, transfers to personal bank accounts…

GPB Capital is a New York-based alternative firm founded in 2013, which focuses on acquiring private companies in various industries, including the waste management and the automotive retail sectors. It has raised more than $1.8 billion in investor equity through various private placement offerings.

Many red flags

The case has many red flags, and the story went from rumors into a free fall:

  • Promises of consistent and high returns, described as ‘income products’.
  • Returns, which turn out to be uncorrelated to market fluctuations.
  • Aggressive marketing strategies, with large commissions ($165m) paid to capital raisers – up to 11.75% commissions, of which 7% to 9% went to the recommending brokers (63 of them, including Royal Alliance Associates, Sagepoint, FSC Securities, Woodbury Financial Services…).
  • Continued capital raising, which continued, despite the firm’s difficulties in deploying the capital.
  • Phone calls and emails from investors never answered.
  • Suddenly interrupted capital raising (2018),
  • Decreased distributions, after the firm stopped raising capital.
  • The resignation of an auditor (November 2018), missed financial statement filing even after a year of delay (April 2019), disclaimed auditor reports,
  • between partners, one accusing the others of running a complex Ponzi.
  • Investigations by New York’s AG (Summer 2018).
  • The clearing firm National Financial service, withdrawing GBP from its platform, declaring it has “no clear value”.
  • Litigations started against the firm in mid 2019, alleging misconduct going back to 2014: one, two, three, four, five
  • Prosecution by authorities, of which Massachusetts’ AG (May 2020) , SEC and the FBI (March 2019).
  • GPB’s investments suddenly losing in value (up to 73% in value)
  • Indictment of the Chief Compliance Officer, Michael Cohn (October 2019). Mr. Cohn left the SEC’s team investigating GBP, to join GBP!
  • The arrest of the CEO, David gentile, who faces 20 years in prison (Madoff got 150 years).
  • Allegations of threats and retaliations against a .
  • The New York attorney General is now also suing GPB and its three managers for defrauding its investors by $700 m.
  • Numerous states, from Alabama to New Jersey, are now following suit.

According to the latest from ADV (June 2019), the firm claimed to manage only $239m… despite raising $1.8 bn.

Ponzi’s are definitely not a thing of the past…



Credits to Bruce Kelly at Investment News for many well researched , of which:


And to Jonathan Stempel at Reuters:

Read our privacy policy for info.

Follow on LinkedIn

Click here to follow Gontran de Quillacq

If already following, go to LinkedIn profile

Written by Gontran de Quillacq

Gontran de Quillacq is an expert witness and a legal consultant. He is a recognized authority in options, trading, derivatives, structured products, portfolio management, hedge funds, mathematical finance, quantitative investment, strategy research and financial markets in general.


Submit a Comment

Your email address will not be published. Required fields are marked *

You May Also Like…

T+1 ?

T+1 ?

Should US stocks settle T+1? The current T+2 settlement date is considered antiquated, and the Robinhood affair (gee, them again???) has relaunched the debate. Here is a review of the DTCC’s proposal, as well as an idea for derivatives traders.

#FinancialMarkets, #DTCC, #Settlement, #Derivatives, #MarketStructure
Navesink International (

read more

Pin It on Pinterest