Several auditing firms have reached a $46 million settlement to resolve claims related to their alleged involvement in the $1.8 billion GPB Capital-Ascendant Capital fraud scheme, which impacted approximately 15,000 investors.
The settlement, detailed in a recent motion for preliminary approval, will conclude claims against the auditors in two related lawsuits connected to the alleged Ponzi scheme. The defendants agreeing to the settlement include CohnReznick LLP, Crowe LLP, Margolin Winer & Evens LLP, RSM US LLP, and WithumSmith+Brown PC, all of whom provided auditing services to the GPB funds managing investor assets.
The auditor defendants faced allegations of negligently preparing false and misleading audits, as well as approving and disseminating inaccurate financial statements for the funds.
Plaintiffs called the $46 million settlement an “excellent outcome” given the risks of continued litigation and potential recovery challenges. Despite the plaintiffs’ belief in the merits of their claims, the settling defendants raised defenses that posed a risk of no recovery, underscoring the value of the agreement.
The settlement class includes approximately 15,000 members who purchased limited partnership units in GPB funds from January 1, 2013, through December 31, 2018. Class counsel plans to request up to 30% of the settlement fund in fees, along with reimbursement for litigation costs. Additionally, 20 proposed class representatives will seek service awards of up to $10,000 each.
This resolution encompasses investors involved in the consolidated Texas class action (“Kinnie Ma action”) and a separate putative class action pending in the Southern District of New York (“Deluca action”).
The underlying litigation alleges that GPB Capital and Ascendant Capital used an aggressive sales strategy promising up to 8% returns, while operating a scheme that relied on funds from new investors to pay earlier investors.
GPB funds invested in sectors including automobile dealerships, waste management, and real estate. The funds ceased selling units in late 2018 following regulatory scrutiny.
Notably, in February 2021, the U.S. Department of Justice indicted GPB Capital CEO David Gentile and Ascendant Capital CEO Jeffry Schneider, who were later found guilty by a jury in August 2024.
Litigation stays ended with the sentencing of Gentile and Schneider in May 2025. Settlements with Ascendant and GPB remain pending.
The plaintiffs in the Deluca action are represented by Daniel L. Berger of Grant & Eisenhofer PA and Catherine Pratsinakis of Dilworth Paxson LLP. The Kinnie Ma plaintiffs are represented by Timothy S. DeJong, Steven D. Larson, Cody Berne, and Elizabeth B. Kinsman of Stoll Stoll Berne Lokting & Shlachter PC. The auditor defendants are represented by Hogan Lovells, Latham & Watkins LLP, Troutman Pepper Locke LLP, Williams & Connolly LLP, and Wilson Elser Moskowitz Edelman & Dicker LLP.
