GPB Capital Holdings, an alternative asset management firm and majority owner of Prime Automotive Group, has been accused of violating Massachusetts securities laws in its marketing materials to investors.
William Galvin, secretary of the commonwealth, filed an administrative complaint Wednesday against GPB following an investigation of more than a year and a half. The complaint accuses GPB of issuing marketing materials containing “material misstatements and omissions” to more than 180 Massachusetts investors.
Those investors, who contributed more than $14 million to five GPB investment funds, did so based on false information that they would be compensated from operational profits, Galvin’s Securities Division said in the complaint.
Investors were promised a yearly 8 percent distribution paid on a monthly basis from operating profits, but eventually the firm could no longer meet those requirements and turned to investor contributions to meet its distribution promise, according…