Darren Michael Kubiak, of Alpharetta, Georgia, a stockbroker formerly registered with Kalos Capital Inc., is referenced in a customer initiated investment related FINRA securities arbitration claim in which the customer requested $1,000,000.00 in damages founded on accusations of breach of fiduciary duty and the violation of securities laws regarding preferred stock, real estate security, and direct investment purchases through Kubiak when he was employed by Kalos Capital. FINRA Arbitration No. 21-01917 (September 17, 2021).
FINRA Public Disclosure shows that Kubiak has been identified in eleven additional customer initiated investment related disputes regarding allegations of his harmful activities while employed by Kalos Capital. On January 18, 2021, a customer initiated investment related FINRA securities arbitration claim regarding Kubiak’s activities was resolved for $19,783.00 in damages based upon accusations of Kubiak’s failure to conduct due diligence on GPB before selling the investment to the customer. FINRA Arbitration No. 20-00411. According to the claim, Kubiak made unsuitable trades.
Kubiak is also identified in a customer initiated investment related FINRA securities arbitration claim which was settled for $72,209.00 in damages supported by allegations of the customer’s account being overconcentrated in direct investments, including GPB, while Kubiak was registered with Kalos Capital. FINRA Arbitration No. 20-01310 (January 18, 2021). The claim alleges that Kalos Capital failed to supervise Kubiak’s alternative investment sales. According to the claim, the securities broker dealer also failed to adequately perform due diligence on GPB.
Another customer initiated investment related FINRA securities arbitration claim concerning Kubiak’s activities was resolved for $47,047.00 in damages founded on accusations of omissions and misrepresentations by Kubiak regarding the direct participation program interests or limited partnership interests purchased through Kubiak and Kalos Capital. FINRA Arbitration No. 20-01532 (January 18, 2021). The claim alleges that Kubiak made an unsuitable recommendation to the customer regarding the alternative investment.
Kubiak is also the subject of a customer initiated investment related FINRA securities arbitration claim which was settled for $160,093.00 in damages based upon allegations of negligence and breach of contract relating to DPPs, LPs, and real estate securities. FINRA Arbitration No. 20-02799 (January 18, 2021). The claim alleges the violation of Tennessee Securities Act, breach of fiduciary duty, and breach of contract, resulting in damages. According to the claim, Kubiak was negligently supervised, and the customer was defrauded.
On January 18, 2021, a different customer initiated investment related complaint involving Kubiak’s conduct was resolved for $60,422.00 in damages supported by accusations that Kubiak provided unsuitable advice concerning alternative investments for the customer’s account at Kalos Capital.
Kubiak is also referenced in a customer initiated investment related FINRA securities arbitration claim where the customer sought $500,000.00 in damages founded on allegations of Kalos Capital’s failure to supervise Kubiak’s activities and violation of securities laws concerning preferred stock and real estate security transactions. FINRA Arbitration No. 21-01917 (July 28, 2021). The claim contains accusations of breach of contract and breach of fiduciary duty resulting in damages.
Kubiak has been fined $5,000.00 and suspended for three months from associating with any FINRA member in any capacity based upon findings that Kubiak made unsuitable recommendations to Kalos Capital customers concerning leveraged and inverse exchange-traded funds (LIETFs). According to the AWC, nineteen leveraged and inverse exchange-traded fund purchases had been recommended by Kubiak for seventeen customer accounts. The AWC states that customers held LIETFs for 722 days on average. Customers collectively experienced $98,000.00 in losses.
The regulator states that before selling LIETFs, Kubiak did not undertake any suitability analysis to understand the risks and features. The regulator noted that Kubiak wanted customers to hold the products for longer than the time identified in published guidance on those products. He did not grasp that the investments typically lose value when held for lengthy periods and that losses are compounded because of how valuations on LIETFs reset daily. FINRA found that Kubiak violated Rules 2111 by making unsuitable recommendations. Kalos Capital was also censured for failing to supervise LIETF sales.
Kubiak was registered with Kalos Capital between January 3, 2007, and October 10, 2019.
