According to reports on Friday, GPB Capital sent a document to broker-dealers on June 22, letting them know of a steep decline in value of its private placement offerings, including Armada Waste Management, LP.
GPB reportedly raised $1.8 billion from wealthy investors through sales of high-risk private placements from registered brokers and their firms while collectively earning $167 million in fees and commissions for the transactions.
On average, advisors and their firms collected 9.3% in commissions through the sale of GPB private placements.
Unfortunately for investors, these investments have dropped significantly in value.
In particular, investors bought $163.4 million of Armada Waste Management, but according to report, the current estimated value of the fund is $53.4 million.
Thus, an investment of $50,000 in Armada Waste Management has reportedly dropped in value 67.4%, and is now worth $16,330.
The White Law Group continues its investigation into the liability that FINRA registered brokerage firms may have for improperly selling alternative investment products like GPB’s Armada Waste Management LP to investors.
Private placements are a means for companies to raise capital through the sale of equity or debt securities without having to register their securities with the SEC. These investments are often riskier and more complicated than traditional investments, and are only suitable for high net worth, sophisticated investors.
Broker dealers are required to perform adequate due diligence on any investment they recommend. They must ensure that all recommendations are suitable for the investor. Recommendations should be in line with the investor’s age, risk tolerance, net worth, and investment experience.
Despite the risks of investing in this type of alternative investments, brokerage firms continue to push this type of investment because of the high commissions associated with their sale and creation.
If you are concerned about your investment in Armada Waste Management LP or another GPB Capital private placement offering and would like to speak with a securities attorney about your options, please call The White Law Group at 888-637-5510 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.
For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit https://www.whitesecuritieslaw.com.