CP Capital Stockbroker Barred For Conversion
Jorge A. Reyes (also known as Jorge Quiroz and as George Reyes) of Miami Florida a stockbroker formerly registered with CP Capital Securities has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity according to a FINRA Extended Hearing Panel Decision containing findings that (1) Reyes made investment recommendations which failed to be suitable given a customer’s investment circumstances (2) Reyes provided customers with misleading investment documentation or information (3) Reyes converted a customer’s funds and (4) Reyes defrauded customers who purchased investments through a private placement. Department of Enforcement v. Jorge A. Reyes Disciplinary Proceeding No. 2016051493704 (Dec. 17, 2019).
Reyes was initially charged by FINRA Department of Enforcement in a Complaint containing accusations of Reyes’ unsuitable advice, conversion and fraud with regard to three private placements which were offered through CP Capital Securities: CP Income; CP Venture Capital LLC; and CP Venture Capital II, LLC. CP issued notes which were supposed to pay interest ranging from eight to twelve percent; and which contained maturities of two to five years. Reyes raised $4,009,000.00 from eighteen customers through the private placements. Customers then incurred catastrophic losses.
FINRA stated that customers had been defrauded by Reyes through his false or misleading statements in regard to the private placements. Customers were not provided critical information about the risks. They were not apprised of CP Securities’ bad financial prospects or that CP Securities pushed these transactions to finance its operations.
In addition, FINRA stated that $170,000.00 in investor funds had been misused by Reyes. Reyes provided a customer with false assurances concerning the use of those funds. Once Reyes obtained the customer’s money, he used it for his personal needs evidencing his conversion of funds. FINRA also stated that Reyes made false statements to steer that customer towards providing him funds.
FINRA indicated that there was insufficient due diligence performed by Reyes in regard to the private placements. This precluded him from possessing a reasonable foundation to conclude that the investments he recommended were appropriate. FINRA also stated that the marketing materials Reyes widely distributed to customers contained deceptive and misleading representations concerning the private placements.
FINRA’s Extended Hearing Panel concluded that Reyes’ conduct was violative of Securities Exchange Act of 1934 Section 10(b); SEC Rule 10b-5; Securities Act of 1933 Sections 17(a)(2) and 17(a)(3); and FINRA Rules 2010, 2111, 2150 and 2210.
FINRA Public Disclosure additionally reveals that Reyes is the subject of a customer initiated investment related civil action brought in a Miami-Dade County, Florida court in which the customer requested $1,452,000.00 in damages based upon allegations that the customer was induced into investing in CP Venture Capital I, CP Venture Capital II and CP US Income Group by being falsely told that the investments were not promissory notes and that the customer could redeem funds without restriction. Civil Action No. 2016-024809-CA-01 (Oct. 24, 2016).
Reyes’ registration with CP Capital Securities has been terminated as of January 24, 2017. FINRA Public Disclosure reveals that the securities broker dealer was expelled on July 31, 2017.