Rep. Ritchie Torres (D-NY) is calling on the Securities and Exchange Commission to include newly elected Rep. George Santos (R-NY) in its investigation into the company where Santos once worked.
Harbor City Capital, the hedge fund where Santos previously worked, is under investigation for securities fraud and swindling more than 100 investors. Thus far the probe has only focused on the CEO and founder. But Torres argues in his letter to the SEC that Santos should be included in that probe.
Torres acknowledges that there's no evidence yet linking Santos to the Ponzi scheme, but there is reason to believe he operated as a broker in the hedge fund without registering with the SEC, which is a violation of securities law, he said. "Indeed, FINRA's database has no record of Mr. Santos as a licensed broker."
A previous report of the Zoom videos of Santos while working for Harbor City was recruiting millionaire investors who could write checks for a minimum of $5 million.
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The report cited a conversation with the founder, J.P. Maroney, and Santos where he asked questions about how exactly the "obscure form of credit Harbor City claimed to be using guaranteed the safety of investor money."
Still, Santos painted himself as someone who knew what was going on and defended the company as "100 percent legitimate." Therein lies his legal liability.
It's that report that made it clear that Maroney "hired Mr. Santos to perform the function of a broker: to recruit investors and raise funds as the New York Regional Director of Harbor City Capital," wrote Torres.
The previous reports also cited at least "two possible investors who warned Santos that Harbor City Capital's supposed Standby Letter of Credit (SBLC) was a "complete fraud.'"
It was at that point that Santos called the company "100 percent legitimate."
"Santos asserted the authenticity of the SBLC, even as he once admitted on a separate Zoom call that he had no real understanding of how Harbor City Capital manages to generate the high returns it promises investors. Simply put, Santos was selling a product that he himself barely understood," Torres said in the letter.