San Diego adviser faces SEC cherry-picking allegation

Allegedly steered winning trades to favored clients

Aug 30, 2013 @ 12:58 pm (Updated 1:03 pm) EST

A San Diego-based investment adviser and his firm are facing U.S. regulatory claims that they engaged in a cherry-picking scheme that steered winning trades to favored clients and lied about how money was spent.

J.S. Oliver Capital Management and its president, Ian O. Mausner, awarded more profitable trades to hedge funds in which he and his family had invested, the Securities and Exchange Commission said in a statement today. They also misappropriated more than $1.1 million in soft dollars -- credits or rebates paid by clients for trades in their accounts, the SEC said.

“Mausner’s fraudulent schemes were a one-two punch that betrayed his clients and cost them millions of dollars,” Marshall S. Sprung, co-chief of the SEC Enforcement Division’s Asset Management Unit, said in the statement. “Investment advisers must allocate trades and use soft dollars consistent with their fiduciary duty to put client interests first.”

Clients suffered approximately $10.7 million in harm from the cherry-picking scheme, which ran from June 2008 to November 2009, the SEC said. The soft-dollar misappropriation occurred from January 2009 to November 2011, according to the agency, which said its investigation is continuing.

(Bloomberg News)

  @IN Wire

Apr 23 11:55AM
A soon-to-launch ETF is promising income despite the potential rate rises on the horizon
Apr 23 11:28AM
Wednesday links: a deliberate bet

Career Center

Explore your opportunities and be informed for your next move.

Company Type
Firm Type
Clearing Firm
Presented by

Most Watched Video

7:12The 2 biggest factors driving growth in active ETFs

Ugo W. Egbunike Dir. Of Business Development, Greg Crawford Deputy Editor, InvestmentNews

Video Spotlight
1:47People are Living Longer. Good News or Bad News?

Sponsored by Oppenheimer Funds Inc.