The SEC says a state-registered adviser and several other defendants were involved in a $26 million investment fraud scheme, with hedge fund money allegedly spent on a Rolls Royce, Hawks tickets, and jewelry.
In a complaint filed May 7, 2026 in the Southern District of Florida, the Securities and Exchange Commission accuses Reign Financial International, its chief executive Giorgio Johnson, chief operating officer Gary Mills, and Miami resident Patrick Allen of running three fraudulent high-yield investment programs from March 2021 through October 2022. The agency says they raised over $26 million from at least 31 investors. None of it was invested in any legitimate program, the SEC alleges.
The three programs — the Compass Program, the PBL & 5Js Program, and the Reign Program — had the hallmarks of a prime bank scheme. Investors were told their principal would sit safely in a custodial or hedge fund account, come back in a few weeks, and then throw off weekly returns of 75 to 125 percent. One investor was promised a 300 percent monthly return on a $20 million stake. The complaint says none of that was ever going to happen.
For advisers and compliance officers, the eye-opener is what allegedly went on inside Berone Capital, a state-registered investment adviser with active registrations in Georgia, North Carolina, and Texas during the relevant period. Berone reported just over $4 million in assets under management on its June 9, 2023 Form ADV. It had two employees — Jeremiah Beguesse and Fabian Stone — who owned all of it. The firm managed the Berone Capital Fund, LP, a private hedge fund used to hold investor money for two of the three programs. The SEC separately charges Berone, Beguesse, and Stone with misappropriating fund assets and breaching their fiduciary duties as investment advisers.
Within days of a $20 million wire landing in the fund's account, the SEC says, Berone began moving money out. Before the wire, the fund's cash balance was about $260,000. The agency alleges Berone used approximately $850,000 of that money to purchase corporate bonds naming Beguesse and Stone as beneficiaries, and spent more on two luxury cars (a memo line referenced a Rolls Royce), Atlanta Hawks tickets, private jet travel, and jewelry. Another $30,000 allegedly went to Beguesse's girlfriend so she could buy a car.
The due diligence story is just as bad. The SEC says Reign's vetting of program providers "typically consisted of little more than an internet search." The firm did not run background checks, did not confirm track records, and did not speak with the banks that supposedly ran the trading platforms. Yet it sold investors on "carefully crafted financial strategies" and trade platforms it did not actually have.
There were also undisclosed conflicts. Beguesse and Allen were friends and members of the same fraternal organization, and Beguesse had previously been Allen's financial advisor at another broker-dealer. Between June and November 2021, Allen gave Beguesse and Berone roughly $350,000 in "gifts" — some of which, the complaint says, came from money Allen had misappropriated from the Compass Program.
Mills, Reign's chief operating officer, previously served a three-year jail sentence from 2005 to 2008 for conspiracy to commit bank fraud in connection with a mortgage loan scheme, and lost his law licenses as a result, the SEC says.
The Reign defendants and Allen are charged with violations of Sections 17(a)(1) and (a)(3) of the Securities Act and Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c) thereunder — the scheme-liability prongs rather than the misstatement prongs. Reign, Johnson, and Mills also face aiding-and-abetting claims tied to Allen's violations, and Johnson is separately charged as a control person under Section 20(a) of the Exchange Act. The Berone defendants are charged with violating Sections 206(1) and 206(2) of the Investment Advisers Act. The SEC wants permanent injunctions, disgorgement, civil penalties, and an officer-and-director bar against Johnson.
The allegations have not been tested in court. The defendants have not yet filed a response, and no court has ruled.
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