Securities Lawyers Blog
The law offices of Gana Weinstein LLP are currently investigating multiple claims that advisor Chris Kubiak (Kubiak) has engaged in a misappropriation scheme. Kubiak, formerly registered with Calton & Associates, Inc. (Calton) and American Global Wealth Management, Inc. (American Global Wealth) operating out of McDonough, Georgia and Brookfield, Wisconsin respectively has been accused by customers and the Department of Justice (DOJ) of engaging in securities fraud and misappropriating funds.
In October 2018 FINRA barred Kubiak after he consented to the sanction and to the entry of findings that he converted customer funds. FINRA found that four customers, including three seniors, gave funds to Kubiak totaling approximately $270,000 to invest on their behalf. FINRA found that instead Kubiak deposited the funds into his personal bank account and then used them for his own personal use such as gambling and to paying for personal medical bills.
In March 2019 the DOJ announced charges against Kubiak include seven counts of wire and mail fraud concerning Kubiak’s scheme where he arranged to make withdrawals or to liquidate the investment accounts of his elderly clients. The DOJ indictment identifies a total of six clients from whom he is alleged to have wrongfully misappropriated approximately $370,000 over a five year period.
Our law firm has significant experience bringing cases on behalf of defrauded victims when their advisors engage in misappropriation schemes. Kubiak’s activities in the sale of unapproved investment products – is a practice known in the industry as “selling away” – a serious violation of the securities laws. In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.
When advisors convert or misappropriate funds they often create businesses or other vehicles to serve as a cover for the theft of funds. However, federal securities laws and the FINRA rules require firms to monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. In order to properly supervise their brokers each firm is required to have procedures in order to monitor the activities of each advisor’s activities and interaction with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.
In cases of selling away the investor is unaware that the advisor’s investments are improper. In many of these cases the investor will not learn that the broker’s activities were wrongful until after the investment scheme is publicized, the broker is fired or charged by law enforcement, or stops returning client calls altogether.
Kubiak entered the securities industry in 1986. From 1989 until July 2017 Kubiak was registered with Freedom Investors Corp. From July 2017 until August 2017 Kubiak was associated with American Global Wealth. Finally, from July 2017 until October 2018 Kubiak was registered with Calton out of the firm’s Brookfield, Wisconsin office location.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. Investors may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of selling away and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.