Feds charge GPB Capital executive with obstruction of justice

The Department of Justice Wednesday charged the chief compliance officer of GPB Capital Holdings, who is also a former Securities and Exchange Commission examiner, with obstruction of justice relating to an SEC investigation of GPB. The GPB Capital executive, Michael Cohn, allegedly stole information from the SEC before he started working for GPB in October 2018. "When Cohn left the SEC to join GPB, he left with more than his own career ambitions," FBI assistant director-in-charge William F. Sweeney said in a press release. "The proprietary information he allegedly retrieved — from databases he wasn't authorized to access — included compromising information about a GPB investigation and sensitive details related to the same." Mr. Cohn's indictment is the latest in a litany of problems facing GPB, which raised more than $1.5 billion from wealthy clients 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 funds. Investors don't know the value of the GPB funds. A spokesman for GPB, Brian Weisenberger, did not return a call Wednesday afternoon to comment. Mr. Cohn, 59, previously worked as a securities compliance examiner and industry specialist in the SEC's Enforcement Division, where he assisted on investigations into violations of securities laws, according to a statement from the Department of Justice. [Recommended video: Why aren't people joining the financial advice industry?] 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. Mr. Cohn also faces charges of unauthorized computer access and unauthorized disclosure of confidential information. GPB Capital "was stunned to learn today that a Federal Grand Jury in the Eastern District of New York had issued an indictment against" Mr. Cohn, the company's spokesperson, Nancy Sterling, wrote in an email. "GPB Capital immediately relieved Mr. Cohn of his duties as CCO, and replaced him with Aileen Doherty, a veteran chief compliance officer."