Securities Lawyers Blog
The securities lawyers of Gana Weinstein LLP recently filed a complaint on behalf of a client alleging that Kalos Capital, Inc. (Kalos Capital) and Andrew C. Long (Long) failed to supervise Long’s recommendations and investment activity through his d/b/a business Granite Retirement & Tax (Granite Retirement). The complaint alleges that Long, a partner of Granite Retirement, along with others in the organization such as Adam Craig Hendrix (Hendrix), constructed an investment plan for the Claimant that violated multiple securities laws.
The complaint alleges that the Claimant successfully sold his business, was 71 years, and sought investment advice from Long and Hendrix. The Granite Retirement partners recommended that Claimant invest nearly $7 million or over 90% of his savings in illiquid investments. In some cases these investments turned out to be investment frauds. The Claimant alleged that the sole purposes of the investments was to enrich the partners of Granite Retirement to the detriment of Claimant. In total, the claimant alleged that Long and Granite Retirement sought to profit by over $400,000 from the investments recommended while the Claimant lost millions.
Astonishingly, the outrageous commissions charged to Claimant were not sufficient for Long. The Claimant alleged that Granite Retirement entered into a promissory note in order to extract another $300,000 in the form of a promissory note from Claimant in violation of the securities laws. The remaining investments were in a numerous annuities, non-traded real estate investment trusts (Non-Traded REITs), private placements, equipment leasing, and oil and gas private placement programs.
Finally, the Claimant alleged that multiple investments were invested in fraudulent schemes. The complaint alleges that Long and Hendrix recommended investing over $600,000 in Future Income Payment (FIP) an unregistered and illegal security offering. FIP was run by Scott Kohn (Kohn) through several different entities. Numerous state and local regulators and agencies also have concluded that FIP product violates a host of laws including securities, loan laws, usury laws, elder abuse, and consumer protection laws. In addition, Claimant alleges that Long and Hendrix recommended using the income from FIP to fund a $1.4 million variable life insurance policy that required annual premiums of $150,000. FIP’s almost immediate collapse and the illiquidity of the entire portfolio now raise the risk that all preimums on the life insurance policy will be lost.
The complaint also alleges that Claimant was recommended to invest $250,000 in GPB Holdings II LP (GPB) – a speculative private placement. GPB has been embroiled in unresolved scandals as of late leaving investors in the lurch as to what has happened to their investments. GPB has told investors that they should no longer rely on the companies’ 2015 and 2016 financial statements and independent accounts’ reports and ceased offering the funds to investors.
The claim alleges that the investments recommended caused Claimant significant losses and many of the investments generate only paltry returns due to their poor quality. The claim alleges that Claimant has been deprived of the ability to generate the reasonable returns he was entitled to had he been invested in a well-managed and diversified portfolio of equities and bonds and is now trapped in illiquid and fraudulent investments.
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 pump and dump cases and brokerage firms’ failure to disclose conflicts of interests to their clients. Our consultations are free of charge and the firm is only compensated if you recover.