Articles Tagged with Kalos Capital

shutterstock_132704474-300x200Advisor Christopher Shaw (Shaw), currently employed by Pruco Securities LLC (Pruco) and formerly employed by Kalos Capital, Inc. (Kalos) has been subject to at least three customer complaints during the course of his career.  According to a BrokerCheck report the customer complaints concerns alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements.  Shaw runs his securities business through a d/b/a called CJS Wealth Management.  The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

In February 2020 a customer complained that Shaw violated the securities laws by alleging that Shaw engaged in sales practice violations related to engaging in misrepresentations and unsuitable recommendations.  The claim alleges $500,000 in damages and is currently pending.

In November 2019 a customer complained that Shaw violated the securities laws by alleging that Shaw engaged in sales practice violations related to breach of fiduciary duty and unsuitable investments.  The claim alleges $350,000 in damages and is currently pending.

In July 2019 a customer complained that Shaw violated the securities laws by alleging that Shaw engaged in sales practice violations related to unsuitable investments in alternative securities between November 2012 and May 2017.  The claim alleges $450,000 in damages and is currently pending.

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shutterstock_186555158-300x200Advisor Gene Esplin (Esplin), formerly employed by Kalos Capital, Inc. (Kalos) and Triad Advisors, Inc. (Triad Advisors) has been subject to at least one customer complaint during the course of his career.  According to a BrokerCheck report one of the customer complaint concerns alternative investments such as direct participation products (DPPs) like business development companies (BDCs), non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and private placements.  The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

In December 2019 a customer complained that Esplin violated the securities laws by alleging that Esplin engaged in sales practice violations related to allegations that alternative investments purchased at Triad during the Representative’s association with respondent Triad and thereafter during the Representative’s association with respondent Kalos Capital were unsuitable.  The claim alleges $1,000,000 and is currently pending.

DDPs include products such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments.  These alternative investments virtually never profit investors and are almost always unsuitable for investors because of their high fee and cost structure.  Brokers selling these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for the investments.

Several studies have confirmed that Non-traded REITs underperform publicly traded REITs with some showing that Non-Traded REITs cannot even beat safe benchmarks, like U.S. treasury bonds.  Brokers selling these products must disclose to the investor that non-traded REITs provide lower investment returns than treasuries while being high risk and illiquid – but almost never do.  Because investors are not compensated with additional return in exchange for higher risk and illiquidity, these kinds of alternative investment products are rarely, if ever, appropriate for investors.  Continue Reading

shutterstock_20354401-300x200Advisor Joseph Roop (Roop), formerly employed by Kalos Capital, Inc. (Kalos) has been subject to at least seven customer complaints and one bankruptcy during the course of his career.  According to a BrokerCheck report some of the customer complaints concern alternative investments such as direct participation products (DPPs) like non-traded real estate investment trusts (REITs), oil & gas programs, and annuities.  The attorneys at Gana Weinstein LLP have represented hundreds of investors who suffered losses caused by these types of high risk, low reward products.

In addition, brokers at Kalos have been accused of selling millions in fraudulent GPB Capital Holdings (GPB Capital) related investments.  GPB Capital is facing multiple accusations of being a Ponzi scheme, an ongoing U.S. Securities and Exchange Commission (SEC) and FBI investigations, and even GPB’s chief compliance officier being indicted for illegally obtaining information on the SEC’s investigation.  Now even Volkswagen and Toyota are threatening to pull the plug on GPB Capital auto dealerships.  While advisors have been telling investors to do absolutely nothing and just hang in there – this is nothing more than just additional poor advice.  In November 2019 GPB Capital’s admitted that no financial audit would occur anytime in the near future.  The firm has admitted that it has never been profitable and has merely returned investor capital in the past in order to fake a successful business model.  In sum, investors now know there is nothing to hang onto.  By the day, advisor recommendations to do nothing appear to be completely self-serving, out of the loop, and not in the interest of the investor.

In July 2019 a customer complained that Roop violated the securities laws by alleging that Roop engaged in sales practice violations related to unsuitable investments in alternative securities (REITS, etc.) during the time period from 2012 through 2017. The claim alleges $450,000 in damages and is currently pending.

In October 2018 a customer complained that Roop violated the securities laws by alleging that Roop engaged in sales practice violations related to unsuitable investments and sale of securities when not properly registered in the State of Alabama from January 2011 through July 2014.  The claim alleges $100,000 in damages and was settled for $90,000.

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shutterstock_103476707-300x212Advisor William Sines (Sines), currently employed by Berthel, Fisher & Company Financial Services, Inc. (Berthel Fisher) has been subject to at least four customer complaints during the course of his career.  According to a BrokerCheck report the customer complaints concern alternative investments such as direct participation products (DPPs) like non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs.  The attorneys at Gana Weinstein LLP have represented dozens of investors who suffered losses caused by these types of high risk, low reward products.

In July 2019 a customer complained that Sines violated the securities laws by alleging that Sines pressured her into liquidating an annuity which cost her thousands of dollars in surrender penalties and lost interest credit in order to invest her into a REIT which she feels was an inappropriate investment.  The claim alleged $38,651 in damages and was closed.

In November 2017 a customer complained that Sines violated the securities laws by alleging that Sines recommended unsuitable investments.  The claim settled for $19,737.

DDPs include products such as non-traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments.  These alternative investments virtually never profit investors and are almost always unsuitable for investors because of their high fee and cost structure.  Brokers selling these products are paid additional commission in order to hype these inferior quality investments providing a perverse incentives to create an artificial market for the investments.

Several studies have confirmed that Non-traded REITs underperform publicly traded REITs with some showing that Non-Traded REITs cannot even beat safe benchmarks, like U.S. treasury bonds.  Brokers selling these products must disclose to the investor that non-traded REITs provide lower investment returns than treasuries while being high risk and illiquid – but almost never do.  Because investors are not compensated with additional return in exchange for higher risk and illiquidity, these kinds of alternative investment products are rarely, if ever, appropriate for investors.

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shutterstock_54642700-300x200According to our investigation Kalos Capital, Inc. (Kalos Capital) and its brokers possibly including Eric Weschke (Weschke) have recommended GPB Capital Holdings (GPB Capital) private placements to investors.  Weschke has been subject to at least 13 customer complaints and two regulatory action during the course of his career.  According to records kept by The Financial Industry Regulatory Authority (FINRA), Weschke’s customer complaints allege that Weschke recommended unsuitable securities recommendations in a variety of products including alternative investments, real estate securities, and private debt among other allegations of misconduct in the handling of customer accounts.

In February 2019 a customer filed a complaint alleging that Weschke violated the securities laws by, among other things, that Weschke made unsuitable investment recommendations, breach of fiduciary duty, and failure to supervise during the time period October 2015 through 2017.  The claim is currently pending.

In February 2019 a customer filed a complaint alleging that Weschke violated the securities laws by, among other things, that Weschke made unsuitable investment recommendations, breach of fiduciary duty from October 2015 through 2017.  The claim is currently pending and alleged $200,000 in damages.

Investors who have invested in GPB Capital are encouraged to contact us for a free consultation.  Our firm represents multiple clients who have been recommended GPB Capital Holdings (GPB Capital) related investments. GPB invests in a variety of businesses but primarily in auto dealerships and waste management businesses.  However, over the past year controversy has embroiled GPB Capital in a saga including multiple regulatory investigations and even an FBI referral which has left investors clueless to the fate of their investments.  Investors should prepare themselves that the worst possible outcome, including significant losses on their investments, may be unavoidable.

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shutterstock_160071281-300x168The 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.

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shutterstock_182004416-300x200Broker John Oldham (Oldham) was recently sanctioned by The Financial Industry Regulatory Authority (FINRA) in an enforcement action.  According to the FINRA AWC (Letter of Acceptance, Waiver, and Consent 2015046203101) FINRA found that Oldham consented to sanctions that he shared commissions from the sales of alternative investments with an unregistered entity. According to FINRA, Oldham facilitated the sales of the alternative investments totaling more than $4.8 million to customers referred to him and shared commissions with the unregistered entity in the amount of $240,000 for these transactions.  FINRA found that while Oldham executed subscription agreements on behalf of the third-party, in some instances this representation on those forms were inaccurate because Oldham had not communicated with the customer who had executed the subscription agreement.

The securities lawyers of Gana Weinstein LLP are investigating the regulatory complaint against Oldham.  In addition to the regulatory action, there is one employment termination for cause listed for Oldham alleging possible violation of FINRA Rule 2040.

Our firm often handles cases involving direct participation products (DPPs) and private placements including oil and gas partnerships, non-traded real estate investment trusts (REITs), and other alternative investments.

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