Shepherd Smith Edwards and Kantas Investigates Kalos Capital Broker Darren Kubiak Over GPB Investments and Exchange-Traded Funds Sales

Kalos Capital Broker Sold GPB Private Placements and LIETFs 

Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) is investigating customer complaints involving Darren Michael Kubiak, a Kalos Capital broker who is currently suspended from the industry for three months. Kubiak is one of the Kalos representatives who sold GPB Capital Holdings private placements to investors. GPB is accused of operating a $1.8B Ponzi scam. 

Kubiak Suspended By FINRA 

Kubiak’s suspension by the Financial Industry Regulatory Authority (FINRA), however, is related to a separate matter involving his allegedly inappropriate recommendation of leveraged and inverse-traded exchange-traded funds (LIEFTs) to Kalos customers, causing them $98K in losses. He was ordered to pay a $5K fine. 

According to FINRA, Kubiak inappropriately recommended leveraged and inverse-traded exchange-traded funds (LIETFs) to customers without fully understanding the risks involved or the actual investments themselves. For example, he allegedly did not comprehend that LIETFs stood to lose value over time, with losses compounded due to the way their valuation was reset daily. Because investors held the investments for 722 days, they lost money. 

Kalos, meanwhile, is accused of inadequately supervising Kubiak while he sold the LIETFs. The broker-dealer was ordered by FINRA to pay over $86K plus interest in customer restitution and a $30K fine. 

Kalos Capital Sold Investors GPB 

Our broker fraud lawyers have already filed a number of claims against Kalos Capital, which is a subsidiary of Kalos Financial, over its sale of GPB investments to customers. 

Darren Kubiak himself already has one customer dispute on his BrokerCheck record in which the claimants accused him of selling $170K in GPB private placements that were unsuitable for them. They are seeking $500K. There are also two other customer disputes on Kubiak’s record, each seeking about $500K in damages also. 

Kalos, meanwhile, continues to defend itself against allegations that it acted inappropriately by selling the GPB private placements.

Just last month Kalos Financial sent a letter to GPB investors expressing surprise that firm customers were claiming they were never apprised of the risks involved with the private placements. Kalos president, Larry Lyons, contends that customers were sent detailed documents “explicitly” stating these risks.

Such claims by Lyons are no comfort to the investors who were sold GPB investments by Kalos and more than 60 other broker-dealers. Recent reports show that brokerage firms made more than $160M in commissions from GPB fund sales, while investors are the ones who have suffered big losses. 

Fund investors and regulators haven’t even received audited financial statements for over a year now, which means buyers have no way of knowing what their investments are worth — that is if they are worth anything at all. 

GPB Capital Fraud

Our investor lawyers at SSEK Law Firm have been hard work filing multiple claims against Kalos Capital, a Georgia-based broker-dealer, on behalf of its customers that sustained losses from investing in GPB Funds because they were sold to them by the firm’s brokers, including Kubiak.

Please contact SSEK Law Firm if you sustained LIETF losses or GPB investment losses while working with Darren Michael Kubiak, another Kalos broker or any other broker.