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. Continue Reading