Advisor Darren Kubiak (Kubiak), according to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA), has been accused of selling GPB Capital. Kubiak is formerly registered with member firm Kalos Capital, Inc. (Kalos Capital). In addition, Kubiak disclosed three total customer complaints and one FINRA regulatory action. If you have been a victim of Kubiak’s alleged misconduct our firm may be able to assist you in recovering funds.
FINRA alleged in a regulatory filing that Kubiak consented to sanctions and findings that he recommended the purchase of leveraged and inverse exchange traded funds (LIETFs) to customers without having a sufficient understanding of the risks and features associated with the LIETFs. FINRA found that Kubiak failed to have a reasonable basis to make these recommendations. In addition, according to FINRA Kubiak recommended these customers purchase LIETFs then held them for an average of 722 days causing Kubiak’s customers to incur approximately $98,000 in losses. FINRA found that Kubiak failed to perform reasonable due diligence and accordingly did not understand that LIETFs are generally expected to lose value over time and that losses are compounded because of daily resets.
Our firm’s investigation has found that brokerage firms failed to conduct due diligence and investigate multiple aspects of GPB Capital’s business including its senior management, fantastical business claims, and intra-fund lending practices. For instance, with respect to GPB Capital’s senior management the company was founded by David Gentile (Gentile). Had brokerage firms investigated GPB Capital’s senior manager it would have found that prior to founding GPB Capital, Gentile’s experience was as a CPA and company advisor with the accounting practice his family ran at Gentile Pismeny & Brengel, LLP (GP&B) in New York. Nonetheless, GPB’s PPMs claimed expertise in these areas. GPB Holdings II, LP, PPM, pg. 9 (Apr. 13, 2015) (“GPB’s senior management have a great deal of experience investing in the Automotive Retail, Managed IT Services and Life Sciences sectors.”).
In addition, over the past year controversy has embroiled GPB Capital in what seems to be a never ending saga of investigation and accounting delays. Recently, GPB’s chief compliance officier was indicted for illegally obtaining information on the SEC’s investigation into GPB Capital and sharing it with the firm. GPB Capital is the subject of multiple regulatory investigations and even an FBI referral which has left investors clueless to the fate of their investments.
GPB Capital Holding’s funds include:
GPB Cold Storage
GPB Automotive Fund
GPB Automotive Income
GPB Holdings II and III
GPB Waste Management
GPB NY Development
Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client after conducting due diligence. Due diligence includes an investigation into the investment’s properties including its benefits, risks, tax consequences, issuer, history, and other relevant factors. Appropriate due diligence would identify that an alternative investment’s high costs, illiquidity, and conflicts of interests that would make the investment not suitable for investors.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.