Legal: Compliance chief pocketed $78,490 cherry-picking winning trades for himself

A compliance officer stole from his own clients for nearly four years, cherry-picking winning trades for himself and sticking them with the losers.

Gregory David Paris ran compliance at Barrington Asset Management, an Illinois investment advisor. That made him the person responsible for making sure the firm followed the rules and treated clients fairly. Instead, regulators say he gamed the system to pocket $78,490 while his clients took losses on the same stocks.

The Securities and Exchange Commission announced the sanctions on February 10, detailing a scheme that ran from December 2015 through October 2019. The playbook was simple but effective.

Paris would buy stocks through omnibus accounts, essentially holding tanks that let him execute trades without immediately deciding who would own them. Then he would wait. As the trading day unfolded, he watched which positions moved up and which moved down.

Near the close of trading, Paris made his allocations. He gave himself a larger share of both same-day trades and multi-day trades that achieved gains on the first day. He allocated to client accounts a larger share of trades that resulted in losses on the first day.

Sometimes he closed out positions the same day, buying and selling before allocating both sides of the trade. Other times he left positions open overnight. Overall, his same-day trades achieved cumulative gains on the first day while his multi-day trades achieved first-day cumulative losses.

The pattern allowed Paris to achieve first-day gains on trades in certain securities during the period. His advisory clients received first-day losses during that same period on trades in those same securities, demonstrating they were disadvantaged by his allocation decisions.

What makes the case particularly troubling is what Barrington told clients in writing. The firm's regulatory disclosures promised to minimize the risk that any client could be systematically advantaged or disadvantaged in connection with batched orders. The brochures said it was the firm's expressed policy that no employee would prefer his own interest to that of an advisory client. In connection with that policy, the disclosures stated that employee trading was reviewed regularly.

Paris worked with a consultant to draft those brochures. He reviewed them and approved the statements before Barrington sent them to clients. But the firm never actually reviewed his trading and allocations. Not once.

The firm managed about $62 million as of its October 2025 filing, and Paris handled trades for fewer than ten advisory client accounts during the period. Small operation, but the breach of trust was complete.

Paris now faces a six-month suspension from association with any broker, dealer, investment advisor, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization. He is also prohibited from serving as an employee, officer, director, member of an advisory board, investment advisor or depositor of, or principal underwriter for, a registered investment company during that period. The suspension takes effect on the second Monday following the order.

The financial penalties are substantial. Paris must pay disgorgement of $78,490, prejudgment interest of $31,048.24, and civil penalties of $40,000, totaling $149,538.24.

The SEC granted him a payment plan with five installments over 360 days. He must pay $35,000 within ten days of the order, then $28,634.56 at 90 days, 180 days, 270 days, and 360 days. If he misses a payment, all outstanding amounts become due immediately.

Barrington received a censure but no financial penalties. Both the firm and Paris settled without admitting or denying the findings, though they admitted the Commission's jurisdiction.

The case highlights risks with omnibus accounts when oversight fails. Paris had discretion over trade allocations and knew which trades made money before deciding who would own them. Nobody checked his work, despite written promises to clients that such reviews happened regularly.

Paris served as executive vice president and chief compliance officer at Barrington. He also owned a minority interest in the firm and had been an investment advisor representative there since 1996.