Investors Bring Securities Arbitration Claim Against Kalos Capital For Negligence
Darren Michael Kubiak of Alpharetta Georgia a stockbroker formerly employed by Kalos Capital Inc. is the subject of a customer initiated investment related arbitration claim which was settled for $250,000.00 in damages based upon allegations that a contract had been breached and that a fiduciary duty that was owed to the customer had been breached during the time that the stockbroker was associated with Kalos Capital Inc. Financial Industry Regulatory Authority (FINRA) Arbitration No. 19-02629 (June 15, 2020).
According to the claim, the customer purchased private equity investments as well as alternative investments including direct participation program interests or limited partnership interests. These transactions were allegedly negligently supervised. The stockbroker’s negligence allegedly caused the customer’s losses. The claim also alleges that investment recommendations made to the customer were unsuitable.
FINRA Public Disclosure reveals that Kubiak has been identified in three more customer initiated investment related disputes containing accusations of his misconduct while he was employed by Kalos Capital. On July 12, 2019, a customer filed an investment related complaint regarding Kubiak’s conduct where the customer sought $495,368.500 in damages supported by allegations of unsuitable alternative investment being sold to the customer between 2012 and 2017. The claim alleges that the customer experienced losses on business development corporation holdings as well as private debt and real estate securities.
Kubiak is referenced in a customer initiated investment related arbitration claim where the customer requested $500,000.00 in damages founded on accusations of alternative investments failing to be suitable for the Kalos Capital customer. Financial Industry Regulatory Authority (FINRA) Arbitration No. 20-00037 (Jan. 9, 2020).
On May 13, 2020, another customer initiated investment related arbitration claim concerning Kubiak’s conduct was resolved for $152,500.00 in damages based upon allegations that a contract between the customer and the securities broker dealer had been breached and that the Kalos Capital customer experienced unwarranted losses on real estate securities as well as private equities transactions. FINRA Arbitration No. 19-01396. The claim alleges that Kubiak was negligent and that his investment advice was not appropriate for the customer. According to the claim, a fiduciary duty owed to the customer had also been breached.
FINRA Public Disclosure also confirms that Kubiak has been fined $5,000.00 and suspended for three months from associating with any FINRA member in any capacity supported by accusations of Kubiak having recommended inappropriate leveraged and inverse exchange traded funds to Kalos customers. Letter of Acceptance Waiver and Consent No. 2016048196801 (Sept. 6, 2019).
According to the AWC, 19 LIETF transactions had been recommended for a total of 17 customers on a solicited basis by Kubiak. Customers held these products for extended periods resulting in cumulative losses of $98,000.00. FINRA stated that Kubiak did not possess an adequate understanding of features and risks relating to LIETFs which prevented him from having an adequate foundation to recommend those products. Kubiak did not know that LIETFs could decline in value over time or that losses could be compounded. Kubiak’s conduct was violative of FINRA Rules 2010 and 2111 as well as National Association of Securities Dealers (NASD) Rule 2310.