News and Articles

Monthly Archives: February 2023

David A. Weintraub, P.A. is Investigating Losses Related to Closed-End Funds

The national securities and investment fraud law firm, David A. Weintraub, P.A., continues to investigate claims regarding the recommendation and sale of closed-end funds. Closed-end funds can involve a high degree of risk and may be unsuitable for certain investors.

Investors who have sustained losses related to investment in a closed-end fund are strongly encouraged to contact David A. Weintraub, P.A. for a free consultation. Aggrieved investors can call David A. Weintraub, P.A. directly at (800) 718-1422 or email: [email protected]

What Is a Closed-End Fund?

Closed-End Funds or CEFs are a type of mutual fund that unlike open-end funds only sells a limited number of shares during its initial public offering (IPO).  Closed End Funds are also known as closed-end investment companies and differ in several ways from the other type of investment companies. There are many types of closed-end funds, but the most common are municipal bond funds or muni bond funds.

Closed-end funds are complex and subject to price volatility. They are less liquid than open-end funds, which are more common.  CEFs may be subject to high fees and expenses.  They can also result in significant losses, particularly when they use leverage to borrow money and generate income.  It is imperative to have a firm understanding of the potential risks involved with investing in a closed-end fund.

The recent market downturn has cost investors in closed-end funds substantial amounts of money, with some CEFs cutting dividends by over 40%.  Rising rates continue to put a stop to the normal payouts, causing retirees, often reliant on this form of investment for income, to suffer.

Contact David A. Weintraub, P.A., for a Free Consultation

If you sustained losses after investing in a closed-end fund, contact David A. Weintraub, P.A., for a free case evaluation. Harmed investors can call (800) 718-1422 or email [email protected] to discuss their legal options. All consultations are free and confidential.

Most cases are handled on a contingency fee basis, meaning that clients are not obligated to pay attorney fees unless money is recovered on their behalf.

FINRA Fined Center Street Securities for GPB Capital Fund Sales

On December 29, 2022, the Financial Industry Regulatory Authority fined Nashville based, Center Street Securities, Inc., for improperly selling GPB Capital Holding private placements.  According to FINRA, Center Street Securities failed to inform nearly 20 investors that GPB had failed to submit its required filings with the SEC.

According to the Letter of Acceptance, Waiver and Consent, filed by FINRA, Center Street “negligently failed” to tell 20 investors in two offerings related to GPB Capital Holdings LLC, that the issuer failed to make timely required filings with the Securities and Exchange Commission. Per FINRA, in connection with these 20 sales, Center Street representatives did not inform the customers that the partnerships in question, Automotive Portfolio and Holdings II had not timely filed their audited financial statements with the SEC or the reasons for the delay. The delay in filing audited financial statements and the reasons for it was material information that should have been disclosed.   Between May 4, 2018, and June 29, 2018, Center Street sold limited partnership interests.  The principal value of those 20 sales, totaled $1,206,000.  These transactions generated $98,727.50 in commissions.   By negligent omitting material facts, Center Street violated FINRA rules.

In settling this matter, Center Street Securities neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.  Center Street Securities, agreed to a public censure and to pay a $70,000 fine and partial restitution of $89,652.50.

If you have not hired an attorney and wish to discuss any securities related question, please contact David A. Weintraub, P.A., 7805 SW 6th Court, Plantation, FL  33324.  By phone: 954.693.7577 or 800.718.1422.