Kalos Capital And GPB Capital: What Is Their Connection?
Shepherd Smith Edwards and Kantas (SSEK Law Firm) is continuing to investigate and file cases against Kalos Capital and its financial advisors in relation to GPB Capital investments. Kalos Capital is a FINRA licensed broker-dealer which is a subsidiary of Kalos Financial. Both are based our of the same address in Alpharetta, Georgia.
According to Kalos’s BrokerCheck Report (FINRA’s official record of firms and brokers), Kalos Financial owns 75% or more of Kalos Capital. According to its website, Kalos Financial was founded by David and Carol Wildermuth in 2004.
Kalos claims to have advisors throughout the country and based on the influx of calls SSEK has received, that representation appears to be true. On its site, Kalos asserts that it provides its advisors with “innovative technology, products and services.”
Kalos further states that they are the “endowment model specialists”, which according to Kalos means they utilize “sophisticated portfolio solutions.” Another part of the site references a “platform of unique products.” What does this all actually mean?
SSEK’s broker fraud investigation has uncovered that at least one of these “unique products” Kalos Capital is offering for its brokers is GPB Capital. GPB Capital is an alternative asset manager from New York. Although a number of Kalos brokers sold this same obscure GPB investment, it appears there is no cross-ownership between Kalos and GPB.
The question being investigated is why did so many Kalos brokers sell GPB Capital to their clients?
The SSEK Investigation: What’s Been Uncovered So Far
The SSEK investigation has uncovered a Kalos Capital business model that seems to largely support one-person advisory firms. Or at least, very small advisory firms across the country. These units often operate under their own advisory name, such as Platinum Wealth Advisory, which is based out of Austin.
The broker for Platinum Wealth Advisory, Joshua Stivers, and Kalos are the subject of a FINRA arbitration case filed by SSEK on behalf of one of the firm’s clients. In addition to Stivers and Platinum Wealth Advisory, SSEK has filed several Kalos cases involving advisors all the way from Washington to New York, and many states in between.
The question this pattern asks is how did all these Kalos employed financial advisors from different parts of the country end up recommending a relatively obscure product like GPB? That’s what SSEK is going to find out via our ongoing discovery efforts.
What Are GPB Capital Investments And Private Placements?
GPB Capital private placements, the product you may own, are not widely sold investments like typical stocks or mutual funds. For example, it would not be unusual for advisors from the same firm but located in different parts fo the country to have client portfolios heavily invested in American Funds, one of the largest mutual fund companies in the country.
However, it is unusual, in our opinion, for all these Kalos employees to be recommending GPB Capital products.
It is common in the brokerage/advisory industry for entities to have internal sales presentations and product pushes to a firm’s sales force. In these presentations, the entity typically extolls the virtues of that particular product to a brokerage firm’s sales force.
If that happened, GPB would have had to have met with upper management at Kalos and received approval. Were the GPB Capital products heavily promoted on Kalos Capitals’ platform of unique products? Were there incentives beyond the extraordinary commissions GPB Capital reportedly paid? Was there a higher payout for GPB products? These questions will be answered as the cases progress.
Kalos Brokers Involved In GPB Capital Sales
In the opinion of Shepherd Smith Edwards and Kantas, there appears to be an unusually high incidence of GPB sales from a sales force whose only connection is Kalos, which is headquartered in Georgia. FINRA records indicate the following individuals were employed by Kalos Capital:
- Joshua Stivers – Greater Austin, TX
- Hunter McFarlin – Greater Nashville, TN
- Jason Mosher – Greater Rochester, NY
- Gary Imel – Seattle-Tacoma, WA
- David Sweat & Frederick Baerenz – Virginia-DC-Maryland
- David Lademan – Greater Detroit, MI
- Eric Weschke – Long Island, NY
GPB Investor Lawyers
SSEK has experience in representing customers of advisors who sold them faulty products. SSEK’s experience shows that if an investment advisor sells a product to one person, he or she often sells the same product to other clients.
If you were a victim of a financial advisor that sold you GPB Capital products based on assurances of safety, it is not your fault. The experienced attorneys at SSEK are experts at FINRA arbitrations and dealing with financial advisors who have fallen under SEC scrutiny.
For the last 30 years, SSEK has filed thousands of claims on behalf of consumers wronged by unscrupulous brokers and brokerage firms. If you were a client of Kalos or any brokerage firm and suspect any sort of wrongdoing from your investment advisor, contact our office for a free, no-obligation consultation of your situation.