CPG Management Co. LLC and Christopher Scott Reid - Consent Order

CON SENT OR DER 1 D EP ARTMENT OF FINANCIAL INSTITUTIONS Secur ities Div is ion PO B ox 41200 Olymp i a, W A 9850 4- 1200 360 - 902 - 8760 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 STATE O F WAS HINGTO N DEPARTMENT OF FINANCIAL I NSTITU TIONS SEC URIT IES DIVIS IO N IN THE MATTER OF DETERMINING Whether there has bee n a vio lation of the Securities Act of Washington by: CPG Management Co. LLC; Christopher Scott Reid; Respondents. Order No. S -24- 3880-25- CO01 CONSENT ORDER INTRODUCTION Pursuant to the Securities Act of Washington, RCW 21.20, the Securities Division o f the Departmen t of Financial Institutions (“Securities Divis ion”) and Res pondent s CPG Manag ement Co. LLC and Christopher Scott Re id do hereby enter into this Conse nt Order in settleme nt of the mat ters allege d herein. CPG Management Co. LLC and Christopher Scott Reid neither admit nor de n y the Findings of Fac t and Conclusions of Law as stated be low. FINDINGS OF FACT Res pondent s 1. CPG Management Co. LL C (CRD No. 316995) was a Washington limite d liability company formed on February 1, 2021 that use d a busines s address in Sammamish, Was hington. On March 21, 2022, CPG Management Co. LL C became regi stered as an i nves tment a dvise r w ith the Secu rities Divis ion. O n September 18, 2023, CPG Management Co. LLC f ile d a For m ADV -W to terminate its registration. CPG Management Co. LLC was administratively dissolved on o r about March 1, 2025. CPG Management Co. LLC wa s owned by C hristopher S. Reid and Daniel Toshne r.

CON SENT OR DER 2 D EP ARTMENT OF FINANCIAL INSTITUTIONS Secur ities Div is ion PO B ox 41200 Olymp i a, W A 9850 4- 1200 360 - 902 - 8760 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2. Christopher S cott Reid (Reid) (CRD No. 6886032) has been an investment adviser representative with the Securities Division s ince Ja nuary 17, 2018. Rei d was the 50% owne r of CPG Management Co. LLC. B etween M arch 2022 and September 2023, Reid was the Manager, Chief Compliance Off icer, and an investmen t adviser r ep resentati ve of CPG Manag ement Co. LLC. During this time period, Reid was a lso dual ly regi stered at another investment advis er that he owned, Presidio Financial Gro up, Inc. which does bus iness as Capital Par tners Wealth Manag ement (“Capi tal Part ners Wealth Manag ement”) (CRD No. 291260). Reid is a res ident o f Samma mish, W as hington. Oth er Relevant Person an d E nti ties 3. Capital Partners Opportunity Fund LL C (CPOF) was a Washingto n lim ited l iability c ompany formed on February 25, 2021 that used a busine s s address in Seattle, W ashington. C POF was a p r iv a te investment fund that was mana ged by CPG Ma nagement Co. LL C. Reid had s ignature authority on C POF’s bank account, which gave hi m cus tody ove r client funds. CPOF was es tablished fo r the pu rpose of making short- term loan s for r eal estate investments, inclu ding the purchase a nd rehabilitation of resid ential homes. CPOF issued both debt and e quity s ecurities to inv es tors. On September 11, 2025, CPOF was diss olve d. 4. C apital P artner s G roup LL C (CP G) is a W ashin gton limited lia bil ity compan y formed on November 14, 2019 that used busines s addres s es i n Seatt le and Sammamish, Washington. CPG was fo rmed by Reid and Toshner. CPG was a private investme nt fund that investe d in real e state, including the purchase and rehab ilitation of residential homes. CP G is currently i n receiver ship as par t of a lawsuit th at was filed in King County Superior Court in November 2024. 5. Daniel Toshner (Toshner) was a m ember and 50 % owner of CPG M anagement Co. LL C. Toshner has never been r egistered as an investment advi ser repr esentative or securi ties salesperson. Toshner previously resided in Seattle, Washington.

CON SENT OR DER 3 D EP ARTMENT OF FINANCIAL INSTITUTIONS Secur ities Div is ion PO B ox 41200 Olymp i a, W A 9850 4- 1200 360 - 902 - 8760 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Natu re of the Conduct A. Raising I nves tor Funds Thr ough the Sal e o f Sec urities I ss ued by CPG a nd C POF 6. In 2019, Reid and Toshner co - founded CPG to fund real e state inves tments. Between approximately 2019 a nd 2024, CPG an d its affiliate d entities pu rchased a nd sold more than a dozen res idential properties (mos tly sing le family homes) in Washington, O regon, and A rizona. Between about 2020 a nd 2023, CPG rai sed approximately $3.2 mil lion from approximately 30 investors, inc luding at lea st eight in ves tors who wer e also clients of Reid’s other inves tment a dviser, Capital Partners Wealth Manag ement. 7. CPG sold both debt and equity inves tments to inves tors. S ome investors entered into subsc ription agreements with CPG and receiv ed a P rivate P lacement Memor andum (PPM). O ther investo rs receiv ed a document t hat was caption ed “Investmen t Return A greement” an d which paid a return on inves tment r anging f rom 1 0% t o 1 5% per year. So me CPG investors ha ve been fully repai d and received profits on their investments, while other investors ha ve not been repaid, a s disc usse d below. 8. In March 2022, CPG Management Co. LLC was formed to advise C apital Partners Opportunity Fund LLC (CPOF), a privat e real estat e investment fund that focused on p roperty-flipping. Between March 2021 and June 2022, CPOF raised ap proximately $1.6 million from a pproximately two doze n inve stors as part of a Re gulation D Rule 506 (b) offering. At least five CPOF investors wer e advisory clients of Reid ’s other investment advis er, Capit al Partn e rs Wealth Management. The PPM fo r CPOF state d that the fund wa s o ffering m embe rship units and sec ured promissory notes that had a n inves tment return of 1 0% per annum. According to the PPM, the prom issory notes issued to investors would be s ecured by th e a ssets of CPOF. 9. In July 2023, CPOF’s auditor completed audited financial s tatements for 2022. The audit found that CPOF had a loss of more than 50% in 2022 and was owed tens of thousands of dollars b y other entit ies, as discussed below. A few weeks later, on Septemb er 18, 2023, CPG Management Co. LLC filed a Form ADV - W to ter minate its regis tration as an in v estme nt advis er.

CON SENT OR DER 4 D EP ARTMENT OF FINANCIAL INSTITUTIONS Secur ities Div is ion PO B ox 41200 Olymp i a, W A 9850 4- 1200 360 - 902 - 8760 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 10. By June 2025, CPG wa s a nonfunctioning entity with l es s than $500 in cas h on hand. At that time, C P G still owned two properties in O regon t hat are presently being sold by a court-appointed receiver. According to Reid, the remaining C PG investors a re owed approximately $1.6 million. 11. On September 11, 2025, C POF was d iss olved. C POF investors are still owed more than $950,000, including more than $600,000 that is owed to p romissory note inves tors and approx imately $350,000 t hat is ow ed to equity investors. B. Loans Between A d visor y Client a nd Af f iliated Pers ons and Entit ies 12. Under WAC 460 - 24A- 220, investment a dvisers and inves tment adviser representatives are fiduciaries and have a duty to act p rimarily for th e benefit of thei r clients, and they must subordina te their own interests to those of their clients. WAC 460 -24A- 220(6) prohibit s investment advis ers and inv es tment adviser r epresentat ives from borr ow ing money from their clients and WAC 460 - 24A- 220(7) prohibits them from loaning money to their client. B orrowing and lending arr angements betw een investment adviser s and their clients ar e contrary to the ir fiduciary duty and create a m aterial confl ict of inter est. 13. The 2023 audit report found that CPOF was owed more than $ 400,000, which ha d been loaned to r elated parties. Thes e related parties included C PG, an entity contro lled by Reid and Toshner, w ho were also the co -owners o f CPG Management Co. L LC (the adviser to the fund, CPO F). Between 2021 an d 2022, ther e were numerous fund tra ns fe rs bet ween bank a c counts in the name o f CPOF and CP G, an d inves tor funds from C PG and CPOF were commi ngled. Accoun ting record s characterize m any of t hese transaction s as loans and pr omissory no tes were later creat ed for some of the tr ansactions. In reality, these fund t ransfers fun ctioned as de f acto unsecured loans with no terms or condi tions. 14. The promissory notes that were later drafted indica te that CPOF loaned more than $1.4 million to CPG between 2021 and 2022. Reid us ed funds from CPOF to repay CPG inves tors. CPOF also loan ed funds to QA Compound LL C, another fund for med by Toshner (the co - owner of the adviser). R eid pers onally

CON SENT OR DER 5 D EP ARTMENT OF FINANCIAL INSTITUTIONS Secur ities Div is ion PO B ox 41200 Olymp i a, W A 9850 4- 1200 360 - 902 - 8760 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 invested more than $275,000 in QA Compound LLC and he u sed CP G funds to repay other QA Compound LLC investors. 15. The 2023 audit also found that CPOF received more than $90, 000 i n unsecured loans from companies related to or owned by the managing member of the fund. Reid and Toshner (co - ow ners of the adviser) made loans to C POF through personal ac counts and entitie s that they controlled. C. Books and Records 16. Every investment adviser registered in the state of Wa shington must make and ke ep true, accurate, and cur rent books and records as specified in WAC 4 60 -24A- 200(1). Investment advise r s mus t maintain and preserve the records required by WAC 460 - 24A- 200(1) i n an eas ily accessible p lace for at least six years a nd in their p rincipal o ffice for the first t wo years. As noted above, the Respondents failed t o mak e or keep accurate records regarding the numerous lo ans that were made to and from CPOF, an advis ory cl ie nt. O n January 29, 2024, Re id sent an email to his a c countant and s tated that he was paying an investo r “with CPOF funds. ” Reid ins tructed his accountant to “just journal as a loan against CPG.” Reid further stated: “I am making a mess of paying C POF stuff with CP G money a nd vice [ve rsa]…I apologize profuse ly, but I am keeping track as be st I can, hopefully won’t be too big of a de al.” Base d upon the above Findings of Fact, the fo llowi ng Conclus ions of Law are made: CONCLUSIONS OF LAW 1. Responde nts Christopher S. Reid and CP G Management Co. LL C violated WAC 460 - 24A- 200 by failing to ma ke and keep t rue, a ccurate, and current books and records. 2. Responde nt Christopher S. Reid violated WAC 460 -24A- 220(6) by caus ing an entity that he controlled to borrow money from a p rivate invest ment fund that was an advisory client of CPG Management Co. LLC.

CON SENT OR DER 6 D EP ARTMENT OF FINANCIAL INSTITUTIONS Secur ities Div is ion PO B ox 41200 Olymp i a, W A 9850 4- 1200 360 - 902 - 8760 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3. Responde nt Christopher S. Reid violated WA C 460-24A- 220 (7) by loaning money to a pri vate investment fund that was an a dvisory client o f CPG Management Co. LL C. Base d upon the foregoing and finding it in the publ ic interes t: CONSENT ORDER IT IS AGREED AND ORDERED that Res pondents Chri stophe r S. Reid an d CP G Management Co. LLC and their agents and employees shall cea se and desist from violating WA C 460 -24A -200, an d Responde nt Christopher S. Re id shall cease and desist from violation WAC 460 -24A- 220(6) and WAC 460 - 24A-220(7). IT IS FURTHER AGREED AND ORDERED that Res pondent CPG Management Co. LLC shall be liable for and shall pay a fine of $ 10,000 and Res pondent C hristopher S. Reid shall be liable for and sha ll pay a fine of $ 10,000. The payment sha ll be ma de on or befo re Ap ril 10, 2026. Failure to make said p ayment shall be grounds to vac ate th is Cons ent Order. IT IS FURTHER AGREED AND ORDERED th at Res pondents CP G Management Co. LLC and Christopher S. Reid shal l be jointly liable for and sha ll pay investigative cos ts of $ 5,000. T he payme nt s hall be made on or be fore April 10, 2026. Failu re to make said payment s hall be grounds to vacate this Cons ent Orde r. IT IS FURTHER AGR EED tha t the Secu rities Div is ion has jurisdic tion to ente r this C onse nt Order. IT IS F URTHER AGREED that Respondents CP G Management Co. LLC and Christopher S. Rei d entered into this Conse nt Order fr eely a nd volunta rily and with a full understanding of i ts ter ms and signif icance.

CON SENT OR DER 7 D EP ARTMENT OF FINANCIAL INSTITUTIONS Secur ities Div is ion PO B ox 41200 Olymp i a, W A 9850 4- 1200 360 - 902 - 8760 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 IT IS FURTHER AGREED that in c onsideration of the foregoing, Responde nts CP G Management Co. LLC and Christopher S. Reid waive t h eir right to a hearing and to jud icial review o f this matter p ursua nt to RCW 21.20.440 and C hapter 34.05 RCW. W ILLFUL VIOLATION OF THIS ORDER IS A CRI MINAL OFFENSE. Si gned this _ 16th ____ day of _ ___ January __________________ 2026. Signed by: Responde nt CPG Managem ent Co. LL C _ /s/ ___________________________ Christopher S. Reid, Manager Signed by: _ /s/ ______________________________________ Christopher S. Reid, Individually

CON SENT OR DER 8 D EP ARTMENT OF FINANCIAL INSTITUTIONS Secur ities Div is ion PO B ox 41200 Olymp i a, W A 9850 4- 1200 360 - 902 - 8760 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SIGNE D and ENTERED this 28th day of Januar y, 2026. /s/ ________________________________ Faith L. Anderson Acting Securities Ad ministrator Approved by: Presented by: /s/ /s/ __________________________ ________________________________ Brian J. Guerar d Robert Kondrat Chief of Enforcement F inancial Legal E xaminer