The Securities and Exchange Commission on Wednesday hit a former broker and investment advisor with yet another subpoena after the advisor, Eric M. Cobb, refused to cooperate with the SEC's investigation over his assorted trading practices regarded as cherry picking, or when an advisor gives profitable trades to himself and places unprofitable ones in client accounts.
Cobb was a registered broker with three firms from 1996 to 2016, the last of which was Raymond James Financial Services Inc., according to his BrokerCheck report.
Through 2022, he worked for the registered investment advisor SeaCrest Wealth Management in Spartanburg, S.C.
"Cobb was a former independent contractor with us and stopped working here in the second quarter of 2022," said Ed Sullivan, managing partner of SeaCrest, which has $1.3 billion in assets under management. Sullivan declined to comment about why Cobb left the firm two years ago.
Cobb could not be reached Thursday to comment.
"It looks like the SEC is investigating something this advisor did at SeaCrest, and now he has this subpoena to contend with," said one industry executive, speaking confidentially to InvestmentNews. "But an advisor can only blow off the SEC for so long."
According to an order the SEC filed against Cobb last month, the SEC is investigating Cobb or anyone else that potentially violated federal securities rules by making false statements regarding trade allocations or practices.
"In particular, the Commission is investigating Cobb, a former employee of SeaCrest Wealth Management, engaged in unlawful 'cherry-picking' activity by allocating winning trades to himself or affiliated accounts, to the detriment of his clients," according to the SEC's order. "In connection with the investigation, the Commission staff since May 2023 has repeatedly served Cobb with investigative subpoenas seeking the production of documents from him, and his testimony before the Commission staff."
The SEC's latest Salvo against Cobb is an order to show cause, requiring Cobb to show cause why he should not be ordered to produce documents and appear for testimony.
On Tuesday, a federal court in New York granted the SEC’s application and ordered Cobb to produce non-privileged responsive documents and to appear for testimony, according to the SEC. The court’s order also stated that in the event Cobb does not produce documents or appear for testimony, the court may hold him in civil contempt.
The SEC is continuing its fact-finding investigation and, to date, has not concluded that any individual or entity has violated the federal securities laws.
Also, Orion has added BlackRock, Fidelity, and Vanguard to its custom portfolios suite, and RedBlack has set up a new headquarters after crossing a trillion-dollar milestone.
Also, New York-based Legacy Edge Advisors names its first-ever CEO, while Novare Capital Management hires a Vanguard veteran with a multigenerational planning focus.
Asset managers are racing to bring private market products to retirement plans, but cost and liquidity concerns linger.
Treasury's latest tax-exemption crackdown on private schools lands in the wake of a separate push to restrict refundable credits for some immigrant filers.
Workforce trust measures predicted which companies came out ahead during COVID-19. The same dynamic may now be playing out across the AI transition — and the data suggests the spread could be just as wide.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
