Former SEC Examiner/GPB Executive Pleads Guilty to Misdemeanor Theft of Government Property
Michael Cohn, a former Securities and Exchange Commission examiner who was hired as managing director and chief compliance officer at GPB Capital Holdings in October 2018, pled guilty on Tuesday to misdemeanor theft of government property.
Michael Cohn, a former Securities and Exchange Commission examiner who was hired as managing director and chief compliance officer at GPB Capital Holdings in October 2018, pled guilty on Tuesday to misdemeanor theft of government property.
Federal prosecutors alleged that during discussions with GPB about obtaining a job there, Cohn told GPB senior management that he had inside information about an SEC investigation into the company, which they claim he disclosed. Cohn, who will be sentenced in January 2021, denied the allegations.
Last year, Cohn was charged with obstruction of justice, unauthorized computer access and unauthorized disclosure of confidential information, all felonies. However, the government dropped the felony charges which carried up to 20 years in prison, in return for a misdemeanor plea. He now faces between six months to one year in prison.
Cohn previously worked as a securities compliance examiner and industry specialist in the SEC’s enforcement division, where he assisted investigations into violations of securities laws.
According to a report published by Newsday, Cohn’s attorney, Scott Resnik, said that his client used the information as background to prepare for a job interview at GPB, not for felonious purposes.
“…Cohn was with GPB for less than a year and GPB had no involvement with or knowledge of his wrongdoing,” a company spokesperson told the publication. “GPB terminated Cohn immediately upon learning of the situation.”
GPB focuses on acquiring private companies in various industries, including the automotive retail and waste management sectors, and raised more than $1.8 billion in investor equity through various private placement offerings.
GPB halted raising new money in August 2018 and suspended redemptions “to focus on accounting and financial reporting” on two of its private offerings, the GPB Automotive Portfolio and the GPB Holdings II.
In March 2019, representatives from the Federal Bureau of Investigation and the New York City Business Integrity Commission made an unannounced “visit” to the company’s headquarters in Manhattan. At the time, GPB said that the agencies obtained a search warrant to collect materials from the premises and believed that the visit was a continuation of previous ongoing inquiries.
Specifically, GPB disclosed that in the summer of 2018 it received a subpoena from the U.S. Attorney’s Office – Eastern District of New York that requested documents related to a waste management fund in connection with the NYC Business Integrity Commission’s investigation.
Additionally, the firm has received subpoenas from the SEC and the New Jersey Bureau of Securities and said that it is cooperating with the various agencies and their document requests.
GPB has missed multiple deadlines for its audited financial reports, most recently due to the resignation of the firm’s auditor and audit committee in November 2019.
And more recently, in May 2020, the Massachusetts Securities Division charged GPB with allegedly violating state securities laws, after an investigation found that the company purportedly issued marketing materials to more than 180 Massachusetts investors which contained material misstatements and omissions.
