The Securities and Exchange Commission on Thursday charged a Louisiana-based advisory firm and its two owners — a husband and wife — for defrauding clients via a cherry-picking scheme perpetuated over several years.
World Tree Financial and its owners — Wesley Kyle Perkins, the CEO and CIO, and Priscilla Gilmore Perkins, the firm's head of compliance, operations and finance — allegedly cherry-picked trades over a four-year span.
The scheme — under which advisers allocated winning trades to themselves or favored clients and allocated the losing trades to other clients — generated in-house profits for World Tree and a select number of clients while causing "substantial losses" for other clients, the SEC claimed.
The alleged fraud also misled clients who received better trades into thinking the firm managed money better than was true in reality, according to the SEC.
Neither Mr. or Ms. Perkins had returned a call seeking comment on the allegations by press time.
World Tree, based in Lafayette, Louisiana, had $54 million and 161 individual clients as of March 2018, according to the SEC's civil complaint, which was filed Sep. 18 in the U.S. District court for the Western District of Louisiana. The firm withdrew its SEC registration in June 2012, and is currently registered as investment adviser with the state of Louisiana.