- December 23, 2019
- CP Capital Securities
Jorge A. Reyes (CRD # 4256834) was a former Financial Advisor at CP Capital Securities in Miami, FL. Jorge Reyes has been in the securities industry since 2000 and previously worked at RBC Capital Markets Corporation, Carlin Equities, LLC, and the Partners Financial Group, Inc.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on December 11, 2019, FINRA barred Jorge Reyes from the industry for allegedly defrauding investors in connection with nearly $4 million in investments in private placement offerings, converting $170,000 from a customer, recommending unsuitable investments and using misleading marketing materials.
Specifically, the FINRA complaint alleged that during the relevant time period, Jorge Reyes was a registered representative with CP Capital Group, and his client base consisted largely of Latin American customers. Although he never passed the Series 24 exam, Jorge Reyes held the title of “Managing Director, Emerging Markets.”
FINRA further alleged that Jorge Reyes participated in CP Capital Group’s decision to serve as placement agent for three private placement offerings – CP US Income Group, LLC, CP Venture Capital, LLC and CP Venture Capital II, LLC. Each of these private placements “contemplated raising funds by issuing promissory notes that paid substantial interest.”
In Count I of the complaint, FINRA alleged that “Reyes willfully defrauded investors in the three private placement offerings through misrepresentations and omissions of material fact related to the risks of the investment.” Count II alleged that “Reyes negligently misled investors in connection with the offering through his misrepresentations and omissions.” In Count III, FINRA alleged that “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 expenditures.” In the alternative, Count IV alleged that “Reyes also engaged in conversion by misappropriating $170,000 from the investor.” Count V alleged that “Reyes acted unethically by making misrepresentations to the investor to obtain the $170,000.” Count VI alleged 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.” In Count VII, FINRA alleged that “Reyes lacked an adequate basis to conclude that the private placement offerings were suitable for one specific investor.” And Count VIII alleged 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.”
FINRA barred Jorge Reyes from the industry and ordered him to pay approximately $4 million in restitution, plus interest and hearing costs.
For a copy of the FINRA sanction, click https://www.finra.org/sites/default/files/fda_documents/2016051493704%20Jorge%20A.%20Reyes%20CRD%204256834%20Extended%20Hearing%20Panel%20Decision%20va.pdf.
In addition, Jorge Reyes is the subject of a pending October 2016 complaint in which the customer alleges that Jorge Reyes “indicated that the investment was not a promissory note but rather an investment that she would have access to at anytime.” Alleged damages are $1,452,000.
For a copy of Jorge Reyes’ CRD, click https://brokercheck.finra.org/individual/summary/4256834#disclosuresSection.
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
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