The bankruptcy filing said Kalos’s revenue in 2016 was nearly $28.5 million. However, Carol Wildermuth said that the Covid-19 pandemic had sharply cut into the firm’s revenue at the same time the GPB settlements started. Together, they created “a perfect storm that ultimately led to Kalos’s demise,” she said in her declaration. The Wildermuths have committed to paying $100,000 from their own pockets for the estate to benefit creditors.
Carol Wildermuth did say that her firm had vetted the GPB investments with an experienced due diligence team, including veterans of the boards of the Alternative & Direct Investment Securities Association and the Investment Program Association. She denied the funds were a Ponzi scheme. Since the SEC's monitor was put in place, she said, the investments may yet have value.
“GBP started filing its previously delinquent audits, and under SEC supervision, the net asset value pricing on all the investments was revised and published, indicating that there was value and the investments were not fraudulent or a Ponzi scheme,” she wrote in her declaration. “Because of the repricing, some of the clients who filed claims against Kalos may actually make money from the GPB investment.”
As of press time, the Wildermuths could not be reached for comment.
The lists provided by class action plaintiffs point to some 80 firms in total that allegedly recommended or sold GPB. Besides the firms already mentioned, a partial list includes Aegis Capital Corp., Arete Wealth Management, Cabot Lodge Securities, HighTower Securities, Money Concepts Capital Corp., Orchard Securities, SagePoint Financial, Woodbury Financial, Eisner Amper, FSC Securities, Triad Advisors, SCF Securities, Vanderbilt Securities and WestPark Capital.