The former chief compliance officer at the $1.8 billion private investment firm GPB Capital Holdings on Tuesday pleaded guilty to theft of government property, according to a spokesperson from the U.S. Attorney's office in the Eastern District of New York.
The executive, Michael Cohn, faces up to one year in prison when he is sentenced in January 2021. While he had originally faced felony charges, his plea on Tuesday was reduced to a misdemeanor, noted his attorney, Scott A. Resnik.
"Michael Cohn feels vindicated by the resolution of this case to a misdemeanor," Resnik said. "He maintains his innocence regarding the felony charges."
The misdemeanor charge Cohn faced was in relation to his accessing and retrieving non-public and confidential information about Securities and Exchange Commission investigations into GPB and using that information to get a job at GPB, according to John Marzulli, the spokesperson for the U.S. Attorney's office.
A former SEC examiner, Cohn was charged last October with obstruction of justice relating to an SEC investigation of GPB. He allegedly stole information from the SEC before he started working for GPB in October 2018.
Resnik, Cohn's attorney, said that his client never shared any confidential SEC information with the company.
"Former SEC and GPB employee Michael Cohn was with GPB for less than a year and GPB had no involvement with or knowledge of his wrongdoing," wrote GPB spokesperson Nancy Sterling in an email. "GPB terminated Cohn immediately upon learning of the situation."
Cohn’s guilty plea is the latest in a litany of problems facing GPB, which raised more than $1.8 billion from wealthy clients starting in 2013 to invest primarily in auto dealerships and trash hauling businesses.
The company is under investigation by the FBI and SEC and has failed to produce audited financial statements for its private placement funds. About sixty broker-dealers sold GPB private placements to wealthy customers and brokers and their broker-dealers are now facing investor complaints regarding the sales of GPB products.
And this summer, GPB in a filing with the SEC reported a drop of $238.6 million in regulatory assets under management and, so far, has made no public explanation for the decline.
A $141M judgment and a federal asset freeze collide over one shrinking pool
The firm's CFO and EVP of Wealth Management Solutions are the latest executives to exit the broker-dealer.
Clients are saying they would consider switching advisors if another professional offered estate planning services, according to a new Trust & Will survey.
CEO Laurel Taylor says the fintech's composable AI stack helps workers optimize dollars across Trump Accounts, 529s, 401(k)s, and other employee benefits.
The bank has swiped three private banking veterans from BNY as the city climbs the ranks of America's fastest-growing wealth hubs.
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.
