Former Madison Avenue Broker Subject of Numerous GPB-related Investor Complaints
As disclosed by the Financial Industry Regulatory Authority (FINRA), former financial advisor Jeffrey Raymond Dixson (Dixson, CRD No. 4166311) has been named or otherwise involved in numerous customer arbitrations related to the sale of various GPB fund offerings. Specifically, Mr. Dixson—who was previously affiliated with Madison Avenue Securities, LLC (Madison Avenue), in that firm’s Vancouver, WA branch office—has been the subject of at least ten customer-initiated arbitrations concerning the sale of various GPB funds. As we discussed in a previous blog, GPB Capital, which issued investments in various private placement offerings, has been accused of running a $1.7 billion Ponzi-like scheme that purportedly defrauded more than 17,000 investors nationwide.
Mr. Dixson was a longtime financial services professional, having entered the securities industry around 2000. Over the course of his near two-decade career, he was affiliated with a number of brokerage firms. Most recently, from 2007 until his separation from employment in December 2019, he was employed by San Diego-headquartered Madison Avenue. As of the date of this writing, Mr. Dixson is the subject of nine pending securities arbitration cases, the majority of which concern GPB-related investments.
For example, one pending matter alleging damages of $195,000 concerns “unsuitable [investment] recommendations of GPB and other alternative investments, failure to supervise and breach of fiduciary duty starting in 2015.” Another pending matter alleging damages of $545,000 concerns “unsuitable recommendations of alternative investments, including GPB Automotive.” And another pending claim alleging damages of $100,000 concerns an “unsuitable recommendation of GPB and one other alternative [investment].”
Investors in GPB acquired their interest in various GPB funds through private placement offerings. Private placements are very risky investments due to their nature as unregistered securities offerings. Unlike well-known stocks that are publicly traded—and therefore must meet stringent registration and reporting requirements as set forth by the SEC—private placements do not have the same regulatory requirements and oversight. Typically, private placements are sold through an exemption from registration pursuant to Regulation D (Reg D) of the Securities Act of 1933.
Investing in a Reg D private placement is risky because investors in such unregistered securities will usually only receive very limited information (often provided through a private placement memorandum, or similar offering document). In some instances, investors in private placements may receive unaudited financials, or an overly optimistic growth forecast, which may have been prepared by a third-party firm hired by the investment sponsor. Such lack of information and the potential for conflicts of interest make investing in private placements risky and complex.
Brokerage firms, and by extension their financial advisors, have a duty to perform adequate due diligence on any investment recommended to customers, including private placements offered under Reg D. Further, financial advisors have a duty to disclose the risks associated with such an investment, as well as conduct a suitability analysis to determine if the investment meets an investor’s stated investment objectives and risk profile.
If you have invested in any of the GPB funds and have suffered losses or are unable to exit your illiquid investment and wish to learn more about your legal rights, you may contact us by telephone at (201) 771-1115 or by email at info@gialawgroup.com for a complimentary and confidential consultation. The attorneys at Giarrusso Law Group LLC have significant experience working closely with investors in complex and illiquid investments, including private placement offerings, to recover their investment losses through securities arbitration before FINRA.