Ex-GPB executive gets 9-month sentence

The former chief compliance officer at the $1.8 billion private investment firm GPB Capital Holdings last month was sentenced to nine months of home confinement after pleading guilty in September to theft of government property.

The executive, Michael Cohn, had faced up to one year in prison and felony charges, which was reduced to a misdemeanor. He was also fined $50,000, according to the sentencing filing from March 24 in federal court in Brooklyn, New York.

A former Securities and Exchange Commission examiner, Cohn was charged in October 2019 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.

Scott A. Resnik, Cohn’s attorney, told InvestmentNews last year that the compliance officer never shared any confidential SEC information with the company.

The Cohn matter is separate from FBI and SEC fraud charges in February against three senior GPB executives, including its founder David Gentile, who is no longer with the company.

Gentile and two other GPB executives allegedly lied to investors about the source of money used to make an 8% annualized distribution payment to clients, according to the SEC’s complaint. About 60 broker-dealers sold the private placements to customers.

Since February, an interim CEO, Rob Chmiel, and an independent monitor, Joseph T. Gardemal III have been appointed to manage GPB and its partnership funds.

GPB told investors this week in a letter that it has hired Henderson, Hutcherson & McCullough, an independent valuation firm, to work on the analysis of its holdings. Two private GPB funds are almost three years late in releasing audited financial statements, raising serious questions about the companies.

Related Topics: GPB Capital Holdings, Securities Fraud