San Diego adviser faces SEC cherry-picking allegation

San Diego adviser allegedly steered winning trades to favored clients and lied about how money was spent.
DEC 26, 2013
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)

Latest News

No succession plan? No worries. Just practice in place
No succession plan? No worries. Just practice in place

While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.

Research highlights growing need for personalized retirement solutions as investors age
Research highlights growing need for personalized retirement solutions as investors age

New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.

Advisor moves: RIA Farther hails Q2 recruiting record, Raymond James nabs $300M team from Edward Jones
Advisor moves: RIA Farther hails Q2 recruiting record, Raymond James nabs $300M team from Edward Jones

With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.

Insured Retirement Institute urges Labor Department to retain annuity safe harbor
Insured Retirement Institute urges Labor Department to retain annuity safe harbor

A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.

LPL Financial sticking to its guns with retaining 90% of Commonwealth's financial advisors
LPL Financial sticking to its guns with retaining 90% of Commonwealth's financial advisors

"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.