UNSUITABLE INVESTMENTS IN HIGH COMMISSION, COMPLEX ALTERNATIVE INVESTMENTS AND MULTIPLE ILLIQUID INVESTMENT PRODUCTS.

Client has a poor performing investment and brought action against Kalos Capital. The client did not bring action against me. The claimants understood and acknowledged their understanding of the risks, and the investment recommendations were suitable for their stated goals, objectives, and risk profiles. The claimant understood and acknowledged in writing that investments were not guaranteed, and they could have a loss in value. While some investments did decline in value, the overall accounts are profitable. It should be noted that the complaint did not allege the client's portfolio had lost money. The attorney was claiming lost opportunity costs, implying that we should have made more profits for the client and the profits we achieved were not high enough. The complaint was asking for damages in an amount that is the difference of the profits they did make and the profits they think they should have made.

Claiming unsuitable investments in high commission, complex, risky alternative investments, and multiple illiquid investment products

$175,000.00

$25,000.00

Client was solicited by a claimants' law firm based on one poor performing investment to bring action against me and Kalos Capital. The claimants understood and acknowledged their understanding of the risks, and the investment recommendations were suitable for their stated goals, objectives, and risk profiles. The claimant understood and acknowledged in writing that investments were not guaranteed, and they could have a loss in value. While some investments did decline in value, the overall accounts were profitable and client did make a profit. It should be noted that the complaint did not allege the client's portfolio had lost money The complaint was asking for damages in an amount that is the difference of the profits they did make and the profits they think they should have made. The attorney was claiming lost opportunity costs, implying that I should have made more profits for the client and the profits achieve was not high enough. The complaint was asking for damages in an amount that was greater than what the client had invested plus the growth the client had attained. The claimant was asking for damages in the amount of $175,000 and while I vehemently deny all allegations and I wanted to litigate the claim, Kalos Capital, Inc. determined, as a business judgment, that it was in the firm's best interests to resolve the dispute for 14 cents on the dollar ($25,000) rather than incur the time, disruption, and legal expenses associated with a protracted arbitration proceeding. My contribution to the settlement was $0.00 (zero dollars).

Unsuitable investments in high commission, complex, risky alternative investments, and multiple illiquid investment products.

$350,000.00

$40,000.00

Client was solicited by a claimants' law firm based on one poor performing investment to bring action against me and Kalos Capital. The claimants understood and acknowledged their understanding of the risks, and the investment recommendations were suitable for their stated goals, objectives, and risk profiles. The claimant understood and acknowledged in writing that investments were not guaranteed, and they could have a loss in value. While some investments did decline in value, the overall accounts were profitable and client did make a profit. It should be noted that the complaint did not allege the client's portfolio had lost money The complaint was asking for damages in an amount that is the difference of the profits they did make and the profits they think they should have made. The attorney was claiming lost opportunity costs, implying that I should have made more profits for the client and the profits achieve was not high enough. The complaint was asking for damages in an amount that was greater than what the client had invested plus the growth the client had attained. The claimant was asking for damages in the amount of $350,000 and while I vehemently deny all allegations and I wanted to litigate the claim, Kalos Capital, Inc. determined, as a business judgment, that it was in the firm's best interests to resolve the dispute for 11 cents on the dollar ($40,000) rather than incur the time, disruption, and legal expenses associated with a protracted arbitration proceeding. My contribution to the settlement was $0.00 (zero dollars).

Claiming unsuitable investments in high commission, complex, risky alternative investments, and multiple illiquid investment products.

$275,000.00

$20,000.00

Client was solicited by a claimants' law firm based on one poor performing investment to bring action against me and Kalos Capital. The claimants understood and acknowledged their understanding of the risks, and the investment recommendations were suitable for their stated goals, objectives, and risk profiles. The claimant understood and acknowledged in writing that investments were not guaranteed, and they could have a loss in value. While some investments did decline in value, the overall accounts were profitable and client did make a profit. It should be noted that the complaint did not allege the client's portfolio had lost money. The complaint was asking for damages in an amount that is the difference of the profits they did make and the profits they think they should have made. The complaint was asking for damages in an amount that was greater than what the client had invested plus the growth the client had attained. The attorney was claiming lost opportunity costs, implying that I should have made more profits for the client and the profits achieve was not high enough. The claimant was asking for damages in the amount of $275,000 and while I vehemently deny all allegations, Kalos Capital, Inc. determined, as a business judgment, that it was in the firm's best interests to resolve the dispute for 7 cents on the dollar ($20,000) rather than incur the time, disruption, and legal expenses associated with a protracted arbitration proceeding. My contribution to the settlement was $2,500.

QA3 FINANCIAL CORP

Permitted to Resign

REP FAILED TO COMPLY WITH FIRM POLICIES AND PROCEDURES REGARDING ADVERTISING.

BROKER HAD SEMINARS PLANNED WHEN SEMINARS WERE UNILATERALLY WITHDRAWN BY COMPANY (THE SEMINAR MATERIALS WERE PREVIOUSLY APPROVED IN WRITING)