The Securities and Exchange Commission charged GPB Capital Holdings, Ascendant Capital, GPB CEO David Gentile, and Ascendant owner Jeffry Schneider with running a Ponzi-like scheme that raised over $1.7 billion while defrauding 17,000 retail investors through a series of misrepresentations, fees, and the use of later customers' investments to pay off obligations to earlier investors.
According to the SEC's February 2021 complaint, captioned SEC v GPB Capital Holdings, Ascendant Capital, Ascendant Alternative Strategies, David Gentile, Jeffry Schneider, and Jeffrey Lash, the defendants promised early investors annualized returns of 8% and misrepresented similar claims to newer clients, using the later investors' funds to pay off the earlier investors to cover shortfalls.
Jeffry Schneider, specifically, is a FINRA-registered broker (CRD #2089051) presently associated with Ascendant in Austin, Texas and White Plains, New York, after previously serving as a broker with Axiom Capital Management in Austin from 2013 through 2017. A slew of multi-million pending disputes in his BrokerCheck file allege negligence, breach of fiduciary duty, and unjust enrichment related to Schneider's alleged involvement in GPB, including a class action filed alleging violations of the Texas Securities Act. Earlier in his career, Schneider settled several customer disputes alleging fraud, excessive trading, and unsuitable recommendations.
In its complaint, the SEC alleged that Schneider and the other defendants misrepresented, omitted or failed to disclose the millions of dollars in fees and other compensation received by Gentile, Schneider, and Ascendant Capital, similarly failing to disclose conflicts of interest.
The regulator wrote that this fraudulent scheme continued for more than four years in part because GPB "kept investors in the dark about the limited partnership funds’ true financial condition." The complaint indicates that the firm has not delivered audited financial statements for the limited partnerships to investors for 4+ years and that "nearly all of the $1.7 billion raised is still at risk."
In 2019, we wrote the related article, "GPB Capital Sued for Alleged Serious Financial Misconduct." Now, thanks to the SEC's February 2021 complaint, it has become clear that investigators now classify GPB Capital's misconduct as a Ponzi-like fraud.
If you have invested in GPB Capital Holdings or Ascendant Capital or with any broker or financial adviser who misrepresented a recommendation or otherwise led you to invest in a fraudulent Ponzi-like scheme that has proven harmful to your investments or interests, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.