Scottsdale investment adviser’s license revoked in securities fraud case

PHOENIX – State regulators revoked a Scottsdale man’s investment adviser license last week as part of a securities fraud case, officials said.

The Arizona Corporation Commission (ACC) found that Luke M. Johnson misled investors about GPB Capital, a New York-based investment firm that allegedly ran a Ponzi scheme.

In addition to revoking Johnson’s license, the ACC ordered him and his affiliated company, Legend Capital Group, Inc., to pay $229,241 in restitution and a $20,000 administration penalty.

Many of Johnson’s victims were Arizona residents, according to regulators.

How did Scottsdale investment adviser allegedly commit securities fraud?

Johnson allegedly committed securities fraud by telling investors that limited partnership interests in GPB Capital were solid, safe or low risk, even though they were highly speculative investments, the ACC said.

He even continued to solicit new investors after learning that GPB Capital was being investigated for a Ponzi scheme, according to the commission.

In August, a federal jury in Brooklyn convicted GPB Capital owner and CEO David Gentile on charges of of conspiracy to commit securities fraud, conspiracy to commit wire fraud, securities fraud and wire fraud. He faces up to 20 years in prison, according to prosecutors.

The U.S. Securities and Exchange Commission is seeking to appoint a receiver to distribute assets to GPB Capital investors. Information about the process is available at www.gpb-cap.com.

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