Kalos Capital Inc. and Darren Michael Kubiak submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which Kalos Capital was fined for allegedly failing to supervise Darren Michaels unsuitable recommendations all in violation of NASD Rules 3010(a) and 3010(b) and FINRA Rules 3110(a), 3110(b), 2111 and 2010.
Darren M. Kubiak joined Kalos Capital as an investment company and variable contracts products representative in January 2007. According to FINRA Kubiak recommended the purchase of Leveraged and Inverse Exchange Traded Funds (LIETFs) to 17 customers without having a sufficient understanding of the risks and features. The FINRA findings stated that the customers only held the LIEFTs for 722 days during which they incurred losses of $98,000. FINRA also stated that the Kalos Capital Inc. failed to ensure Kobiak had reasonable basis to recommend the LIEFT’S and failed to enforce its supervisory system designed to ensure compliance of laws, regulation, NASD and FINRA Rules in relation to the sales. In addition, FINRA stated that Kalos Capital failed to provide training to all representatives before permitting them to sell the product.
Without admitting or denying FINRA’s findings, Kalos Capital and Darren M. Kubiak consented to the sanctions and to the entry of findings. Kalos Capital was fined $30,000 and ordered to pay $86,614 in restitution to customers and Kubiak was fined $5,000 and suspended for association with any FINRA member in all capacities for three months. The suspension was in effect from October 7, 2019, through January 6, 2020.
Stockbrokers have been known to engage in many practices that may violate industry and firm rules, practices, and procedures. In order to protect investors from stockbroker misconduct, FINRA rules require brokerage firms to establish and implement a supervisory system. The implementation of these industry rules requires supervisors to monitor their employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, and the brokerage firm’s own policies and procedures. If broker-dealers and/or their supervisors fail to establish and implement these protective measures, they may be liable to investors for damages which flow from the broker’s misconduct. Therefore, investors who have suffered losses stemming from unsuitable recommendations, failure to supervise and/or other misconduct by their broker can file claims to recover damages against broker-dealers, like Kalos Capital Inc, which should consistently oversee its brokers’ activities in order to prevent the above-described misconduct.
Have you suffered losses in your Kalos Capital Inc account due to unsuitable recommendations by your broker? Was Darren M. Kubiak your stockbroker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Kalos Capital Inc. stockbrokers who may have engaged in broker misconduct and caused investors’ losses.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 40 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at firstname.lastname@example.org for answers to any of your questions about this blog post and/or any related matter.