Investors in high-risk private placements managed by GPB Capital Holdings have not seen any return from their investments since 2018, the last time any of the six funds paid out distributions to clients. After years of court battles and delays, that could be changing. In January, a court-appointed receiver in charge of distributing assets to 17,000 investors who bought $1.8 billion of GPB limited partnerships starting in 2013 submitted a plan to begin return money to investors. There will be winners and losers among the GPB investors waiting to get money back.
The ongoing effort by the Securities and Exchange Commission to get the financial advice industry to focus on the interest big firms pay to clients for their cash took another turn today when the SEC penalized two broker-dealers of Wells Fargo Advisors $35 million and Merrill Lynch $25 million for not paying clients appropriate interest in advisory accounts. According to the SEC , the difference between the interest paid to customers by the two wirehouses on cash and the yield in other cash sweep programs was almost 4 percent, or 400 basis points. “These penalties are certainly significant enough to draw the big firms’ attention and get the issue straightened out,” said Sander Ressler, managing director of Essential Edge Compliance Outsourcing Services. Financial advisors working at registered investment advisors have a fiduciary obligation to work in the best interest of clients when it comes to investment safety and returns. That includes not using only one investment option for any part of their portfolio, including cash.