SEC bars two advisers for cherry-picking clients' trades

State-registered RIAs in Oregon and California steered best trades to own accounts

Sep 13, 2017 @ 12:37 pm

By InvestmentNews

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(Bloomberg)

The Securities and Exchange Commission has barred two state-registered RIAs for allocating trades in client accounts in ways that benefitted the advisers at the expense of clients.

California-registered investment adviser Jeremy Licht, who did business as JL Capital Management in Sherman Oaks, also was ordered to disgorge $88,504 "in ill-gotten gains from his cherry-picking scheme," in which he directed a disproportionate number of profitable trades to his own account while directing a disproportionate share of losing trades to his clients' accounts.

In addition, he was ordered to pay a civil penalty of $181,071.

For similar trading violations, Gary Howarth and his Howarth Financial Services in Portland, Ore., was ordered to disgorge $38,172 and prejudgment interest of $5,272, as well as pay $160,000 in civil penalties.

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