Investor complaints against brokers and financial advisers who sold private placements issued by GPB Capital Holdings have, until now, been far and few between, an unusual development in a case of the meltdown of a high-risk, high-priced product that has failed to pay investors distributions since 2018 and whose senior executives over the winter were charged with fraud.
GPB and various broker-dealers are named in a variety of class action lawsuits making their way through federal courts. But the lack of a spotlight on individual brokers who sold GPB may be passing, as at least one formerly registered broker and adviser, Jeffrey Dixson, has a BrokerCheck profile that is studded with investor complaints that involve, to some degree, his sale of GPB private placements.
Purportedly investing in yield-producing auto businesses, GPB quickly became a darling to dozens of small and mid-sized independent broker-dealers that sold $1.8 billion of GPB private placements from 2013 to 2018. Such alternative investments can carry some of the largest commissions for brokers, with the rep charging 7% and the house 1%.
According to his BrokerCheck profile, Dixson, based in Vancouver, Washington, was a 19-year veteran of the securities industry, but left at the end of 2019 and was registered beginning in 2007 with Madison Avenue Securities, an independent broker-dealer in San Diego.
The investors suing Dixson allege the product was unsuitable and that there was a failure to conduct due diligence, an over concentration of the product and other claims. He currently faces nine pending complaints from clients and nine more that have been settled since 2019. In those 18 open or settled claims, 11 mention GPB specifically, according to the BrokerCheck report.
Dixson did not return a call on Tuesday to comment. Marty McNees, president of Madison Avenue Securities, also did not return calls to comment.
In total, Dixson has 22 “disclosure” events on his BrokerCheck profile, which include customer disputes prior to the GPB sales and a $6,000 fine from the Washington State insurance commissioner’s office from 2007.
Five investor claims have been settled for a total of $413,000, while six pending claims are seeking $1.2 million in damages.
Real estate securities and annuities are also mentioned in the claims against Dixson. The most recent complaint filed against Dixson involving GPB was in April.
“Dixson liked selling GPB, other alternative investments and annuities,” said Jason Kane, a plaintiff’s attorney. “We’ve represented close to a dozen clients in these claims, but there are a few other brokers we know about who sold multiple clients the GPB private placements. The big commissions mean lots of sales.”
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