Gary Wykle and Alejandro Cortes, Principals of The Republic Group, Charged by SEC for Engaging in Alleged Ponzi Scheme

The SEC’s complaint charged the parties with misappropriating over $1.2M from investors.

The Sonn Law Group is investigating allegations that Gary Wykle and Alejandro Cortes engaged in a Ponzi-like scheme. If you or a family member has suffered losses investing, we want to discuss your case. Please contact us today for a free review of your case.

On August 31, 2020, the SEC announced that it filed charges against Gary Wykle and Alejandro Cortes, former principals of a now defunct “financial services” company, The Republic Group, Inc. based on allegations of defrauding investors through unregistered securities offerings. 

The SEC’s complaint alleges that The Republic Group, Inc., through its president Wykle and executive vice-president and securities salesperson Cortes, raised approximately $9.4 million from at least 150 investors in Puerto Rico and Florida through sales of promissory notes. Wykle and Cortes allegedly told prospective investors that the purchase funds for the notes, which generally offered investors interest rates ranging from 2.5% to 3% per month, would be used to make short-term, high interest loans to travel industry businesses in the Dominican Republic.

As alleged, however, Republic Group never used investor funds to make these loans. Instead, the complaint alleges that Wykle misappropriated more than $1.2 million in investor funds for his own use, and also used new investor money to pay monthly interest to earlier investors. Wykle allegedly also misused offering proceeds by paying undisclosed sales commissions totaling $1.28 million to Cortes. The complaint further alleges that Cortes illegally acted as an unregistered broker while offering and selling Republic’s securities, and that Wykle and Cortes sold the notes without registering their offering of securities.

The SEC’s complaint  alleges that Wykle and Cortes violated the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 and the broker registration provisions of Section 15(a) of the Securities Exchange Act of 1934. The complaint further alleges that Wykle violated the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder.

Without admitting or denying the allegations in the complaint, Wykle and Cortes have consented to the entry of a judgment that imposes permanent injunctions against them, orders Wykle to pay disgorgement of $948,295, prejudgment interest of $136,979, and a civil penalty of $192,768, and orders Cortes to pay disgorgement of $749,280, prejudgment interest of $111,805, and a civil penalty of $75,000. The settlements remain subject to court approval.

On September 2, 2020, the U.S. Attorney’s Office for the District of Puerto Rico announced parallel criminal charges against Wykle and Cortes.

Soto has three other disclosures on his BrokerCheck report.

July 2020 Investigation

• Initiated By: FINRA
• Description of Investigation: FINRA Case #20180597667: On July 17, 2020, FINRA made a preliminary determination to recommend that disciplinary action be brought against Rani Soto alleging violations of FINRA Rules 3270 and 2010 in that Soto failed to provide prior written notice to his member firm of outside businesses prior to being compensated by, or having a reasonable expectation of compensation from them; and violation of FINRA Rules 8210 and 2010 in that Soto failed to timely respond to requests for documents and information related to an ongoing investigation.

Contact Us Today

The Sonn Law Group is currently investigating allegations that Gary Wykle and Alejandro Cortes operated a Ponzi-like scheme. We represent investors in claims against negligent brokers and brokerage firms. If you or your loved one experienced investment losses, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.