Feds charge GPB Capital executive with obstruction of justice

Feds charge GPB Capital executive with obstruction of justice
GPB's chief compliance officer stole information from SEC during its investigation: DOJ.
OCT 23, 2019
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."

Latest News

Financial advisors, what is your volatility game plan for client management?
Financial advisors, what is your volatility game plan for client management?

With targeted "comfort calls" and strategically automated follow-ups, advisors who leverage their CRM systems effectively can show up when clients need them most.

Trump eyes no taxes for Americans making less than $150k, says Lutnick
Trump eyes no taxes for Americans making less than $150k, says Lutnick

The plan could offer $24,000 in relief for some taxpayers, but experts warn of consequences.

No new trial for convicted GPB Capital executives
No new trial for convicted GPB Capital executives

"I've seen lots of denial in this business but this GPB thing take the cake," says one industry executive.

BlackRock-led deal for Panama Ports draws ire from China
BlackRock-led deal for Panama Ports draws ire from China

Commentary from state-owned publication blasts sale to investor consortium as "spineless groveling," denting Hong Kong-based firm's stock.

Gold soars past $3,000 as Trump turbocharges record rally
Gold soars past $3,000 as Trump turbocharges record rally

Higher interest rates and a strong US dollar, which traditionally act as headwinds, haven't deterred market-stung investors from seeking refuge in the yellow metal.

SPONSORED Beyond the all-in-one: Why specialization is key in wealth tech

In an industry of broad solutions, firms like intelliflo prove 'you just need tools that play well together'

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies