Charles Riel and REinvest LLC Charged with Securities Fraud
On September 29, 2015, the Securities and Exchange Commission (SEC) charged a company and its manager with securities fraud of their investors by promising them outlandish “low risk” investment returns and then misusing the investors’ money to, among other things, pay for personal living expenses and engage in risky, undisclosed futures trading.
The SEC’s securities fraud complaint claims that Charles Riel and REinvest LLC raised over $280,000 from at least five investors by implying to sell them securities in REinvest. In the complaint about Riel’s securities fraud, the SEC alleges that although Riel told investors that REinvest was going to invest their money in high yield financial growth vehicles that would create returns as high as 150% over five years, Riel simply stole most of the money by using it to make payments on a mortgage, taxes, and utility and cable bills, and to make cash and debit card withdrawals and charitable donations. The complaint also claims that Riel used investors’ money to make Ponzi-like payments to an earlier investor, and he transferred some investor funds to his sister. Riel also is claimed to have lost some of the investors’ money by trading in crude oil and other futures. The securities fraud complaint also states that Riel did not use any of the investors’ capital to make the investments that he had told investors he would make, and to hide his securities fraud, Riel sent at least two investors false account statements showing that their investments had made a 30% annual rate of return.
The SEC’s securities fraud complaint alleges that Riel and REinvest violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 and that Riel aided and abetted REinvest’s violations of these provisions and is responsible as a control person for REinvest’s violations of Section 10(b) and Rule 10b-5. The SEC seeks permanent injunctive relief, disgorgement of illicit earnings with prejudgment interest, civil monetary penalties, and a verified accounting against the defendants for their securities fraud.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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Brenda Hamilton, Securities Attorney
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Boca Raton, Florida 33432
Telephone: (561) 416-8956
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