Massachusetts regulators are investigating 63 independent broker-dealers who offered private placements sponsored by GPB Capital Holdings.

As GPB halted redemptions and ceased raising new funds, Massachusetts Secretary of State William Galvin received information regarding the sales practices of one firm offering the placements, spurring the investigation.

“While my securities division’s investigation is in the very nascent stages, recent activity within GPB raises red flags of potential problems. These red flags, coupled with the fact that sales of private placements by independent broker dealers have been an ongoing source of investor harm, have led to this investigation,” Galvin said in a statement on Wednesday.

GPB is known for offering high-risk, illiquid private placements with higher than average commissions.

Earlier this year, two private placements offered via GPB, GPB Automotive Portfolio and GPB Holdings II, failed to file required financial statements with the U.S. Securities and Exchange Commission ahead of their April 30 deadlines. The SEC requires private companies with more than $10 million in assets and 2,000 individual investors to file financial statements with the commission within 120 days after the end of their fiscal year. Each of the GPB placements have raised more than $600 million and have more than 4,000 investors.

In August, GPB halted additional fund raises and redemptions, allegedly to focus on its accounting issues.

GPB is also involved in a lawsuit with a former business partner who allegedly failed to sell $40 million worth of auto dealerships to GPB.

The Massachusetts Securities Division is requesting information about the extent of sales activity, as well as information on investor suitability and disclosure and marketing documents provided to investors.

GPB has raised more than $1.5 billion from investors, according to its website.

While announcing his investigation, Galvin also criticized an SEC proposal that would make it easier to offer private placement opportunities to smaller individual investors.

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