Broker Investigation: Jorge A. Reyes

Jorge A. Reyes (CRD#: 4256834) is a former registered securities broker. From 2010 to 2017, Mr. Reyes was employed at CP Capital Securities in Miami, Florida. This brokerage firm has since been expelled from the securities industry.

On December 11th, 2018, the Financial Industry Regulatory Authority (FINRA) filed a complaint against Mr. Reyes stating that he sold fraudulent private securities to more than a dozen investors.

Private Placement Fraud: Former CP Capital Securities Representative Jorge A. Reyes

According to FINRA, the alleged wrongdoing, in this case, occurred between May of 2013 and August of 2016. During this time, investigators believe that Jorge A. Reyes:

• Offered fraudulent private securities;
• Converted the funds of an investor;
• Failed to perform adequate due diligence on behalf of his clients;
• Made unsuitable investment recommendations; and
• Made material misrepresentations in marketing materials.

The private placement offerings in question were CP US Income Group LLC, CP Venture Capital LLC, and CP Venture Capital II LLC. Notably, FINRA contends that Latin American customers were targeted by Mr. Reyes. As a result of the fraudulent misrepresentations and material omissions made by this broker, FINRA alleges that 18 investors collectively lost a total of $4.2 million. FINRA requests that findings of fact and law be entered against this broker and that all appropriate sanctions are imposed.

Findings from another hearing were published on December 17, 2019. In these findings, the charges listed included two cases of fraud in connection with private placement offerings. Cause one alleges that Reyes willfully defrauded investors in the three private placement offerings through misrepresentations and omissions of material facts related to the risks of the investment.

Cause two alleges in the alternative that Reyes negligently misled investors in connection with the offerings through his misrepresentations and omissions.

The next three causes are for alleged conversion. The third cause claims Reyes made improper use of $170,000 from an investor on the false promise that the funds would be used for investment purposes, when in fact Reyes spent the money on personal expenses.

The fourth cause alleges in the alternative that Reyes also engaged in conversion by misappropriating $170,000 from the investor. Cause five alleges that Reyes acted unethically by making misrepresentations to the investor to obtain $170,000. 

Cause six contends that Reyes did not perform adequate due diligence on the three private placements and therefore lacked an adequate basis to believe that the investments were suitable for any investor when recommending them.

Cause seven alleges that Reyes lacked an adequate basis to conclude that the private placement offerings were suitable for one specific investor-a divorced homemaker with two dependent children. Reyes allegedly disregarded her financial situation and investment objectives when making the recommendation. 

The last cause alleges that Reyes marketed the private placement offerings using misleading marketing communications, including PowerPoint presentations that made misleading and deceptive representations to investors about the private placement offerings.

Despite Reyes’s numerous defenses, he was found responsible for causes one through eight. Reyes was barred from FINRA, ordered to repay the $170,000 he converted from an investor, ordered to pay nearly $4 million in restitution, and ordered to pay $14,226.97 in costs. 

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