oreide Law Group has filed a FINRA arbitration on behalf of their clients (Claimants) against: KALOS CAPITAL, INC. (Respondent).
The Claimants are a married couple living in Virginia. According to the lawsuit, the Claimants met in 2016 with KALOS CAPITAL brokers, to discuss retirement planning. The Claimants were looking for a moderate risk investment strategy to generate income to sustain them through retirement. The Claimants opened an account with KALOS CAPITAL, and Kalos brokers, and allegedly invested approximately 50% of their funds into alternative investments which were high risk, high commission, and illiquid. These investments represented the bulk of their retirement savings. The lawsuit states that the Respondent also charged a 1.25% management fee on top of the up to 8% commissions they earned selling the alleged unsuitable, high risk investments that were illiquid and required no daily management.
One investment that the lawsuit alleges KALOS CAPITAL sold to the Claimants was $75,000 of GPB Automotive. GPB Capital has issued nearly a dozen private placement partnership funds which purport to run businesses that span automotive retail, managed IT services, life sciences, waste management, and cold storage supply chain management. The lawsuit alleges KALOS CAPITAL failed to evaluate whether or not GPB Capital had the experience necessary to prudently run the funds.
GPB Capital Holdings was founded in April of 2013 as an alternative asset management company based in New York which focuses primarily on the acquisition of income-producing private companies. The company has raised approximately $1,500,000,000.00 from investors. GPB Holdings II and GPB Automotive Portfolio, have accumulated approximately $1,267,000,000.00 in investor funds. GPB informed brokerage firms in August of 2018 that it was pulling back on its private placement sales. Allegedly, the company failed to make required financial filings with the SEC by April 30 with regards to GPB Holdings II and GPB Automotive. GPB suspended fund redemptions. The Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) have both examined whether brokers engaged in sales practice violations with respect to their sales of the private placements in GPB Capital Funds.
The lawsuit alleges that KALOS CAPITAL and their representatives actions have caused damages to the Claimants of $500,000.00. The lawsuit also alleges: negligence, breach of fiduciary duty, and negligent supervision.
If you were sold GPB products or other illiquid private placements from KALOS CAPITAL and/or their former brokers, contact Soreide Law Group and speak to an experienced securities lawyer at no cost regarding the possible recovery of your investment losses through a FINRA arbitration at: 888-760-6552.
Soreide Law Group represents clients nationwide before FINRA on a contingency fee basis—no fee to you if no recovery.