SEC Charges Unregistered Investment Adviser with Defrauding Puerto Rico Municipality

The Securities and Exchange Commission today charged an unregistered investment adviser based in Orlando, Florida for defrauding the Municipality of Mayagüez, Puerto Rico and misappropriating $7.1 million of taxpayer funds. According to the SEC’s complaint, in 2016, Eugenio Garcia Jimenez, Jr. told municipal officials that he could invest approximately $9 million of the municipality’s funds with no risk to principal and earn the city annual returns of approximately 10%. As set forth in the complaint, the city intended to use returns from this investment to fund municipal projects, including the construction of a new trauma center. The complaint alleges that Garcia falsified documents, including bank correspondence and brokerage opening documents, to convince municipal officials to entrust him with the municipality’s funds.