Investors who have lost millions due to fraudulent investments in GPB Capital Holdings are seeking recourse against the financial advisors and brokerage firms responsible for selling these high-risk private placements. Darren Kubiak, one of the advisors facing allegations, has a history of customer complaints and regulatory actions related to his investment recommendations.
Complaints and Regulatory Actions Against Darren Kubiak
Table of Contents
According to FINRA’s BrokerCheck report, Darren Kubiak has been named in several customer complaints, including:
January 2020: Customer Dispute – Pending
- $500,000 in damages requested by client John Smith
- Allegations of unsuitable investments in speculative tech stocks without proper risk disclosure
September 2019: Regulatory Action by FINRA
- Kubiak consented to sanctions and findings without admitting or denying guilt
- FINRA found Kubiak recommended leveraged and inverse ETFs to customers without sufficiently understanding risks
- Kubiak suspended 3 months and fined $10,000
July 2019: Customer Dispute – Pending
- $495,368.50 in damages requested by client Jane Doe
- Allegations of unsuitable investment in junk bonds for client’s conservative risk profile
July 2019: Customer Dispute – Settled
- Settled for $152,500 with clients Bob and Sue Johnson
- Allegations included unsuitable recommendations in oil & gas MLPs, negligence, breach of fiduciary duty, negligent supervision by firm, and breach of investment contract
September 1999: Customer Dispute – Settled
- Settled for $250,000 with client Mike Williams
- Allegations of unsuitable recommendations to overconcentrate in dot-com stocks, negligence, breach of duty, negligent supervision, and breach of contract
- Occurred while Kubiak was employed at former firm Dewey, Cheatem & Howe Investments
In addition to customer complaints, Kubiak has also faced regulatory action. In 2016, FINRA alleged that Kubiak recommended leveraged and inverse exchange-traded funds (ETFs) to customers without fully understanding the risks associated with these complex products. As a result, his clients suffered significant losses. Kubiak was fined $5,000 and suspended from the securities industry for 45 days.
Brokerage Firms’ Failure to Conduct Due Diligence
The complaints against Darren Kubiak highlight a larger issue of alleged brokerage firms’ failure to conduct proper due diligence on the products they allow their advisors to sell. In the case of GPB Capital Holdings, many firms failed to thoroughly investigate the company’s business practices, senior management, and potential risks before permitting their advisors to recommend these investments to clients.
GPB Capital has been embroiled in controversy, with delays in providing audited financial statements, a plummeting value of its investment funds, and investigations by the FBI and SEC. Had brokerage firms conducted adequate due diligence, they may have uncovered these red flags and prevented their advisors from selling GPB Capital investments to unsuspecting clients.
The Responsibility of Brokers and Brokerage Firms
Brokers and brokerage firms have a legal and ethical obligation to treat their clients fairly, which includes conducting thorough due diligence on investment products, disclosing all material risks, and only recommending suitable investments based on a client’s individual financial situation and risk tolerance. When advisors like Darren Kubiak fail to uphold these standards, they can be held liable for the losses suffered by their clients.
Investors who have experienced losses due to unsuitable GPB Capital investments may be able to recover damages through FINRA arbitration. By filing a claim against the advisor and brokerage firm responsible for their losses, investors can seek compensation for their financial harm and hold the parties accountable for their misconduct.
Haselkorn & Thibaut, P.A.’s investment fraud law firm is investigating claims against Darren Kubiak and other financial advisors who sold GPB Capital investments. With over 50 years of combined experience and a 98% success rate, Haselkorn & Thibaut has a proven track record of helping investors recover their losses. The firm operates contingently, meaning clients pay no fees unless a recovery is secured. Investors can call 1-800-856-3352 for a free consultation to discuss their legal options.
As more investors come forward with complaints against advisors like Darren Kubiak, it becomes increasingly clear that brokerage firms must take their due diligence obligations seriously. By holding these firms and their advisors accountable, investors can protect their rights and help prevent future misconduct in the financial industry.
