SEC Charges Investment Adviser in Cherry-Picking and Soft Dollar Schemes

The SEC announced charges against a San Diego-based investment advisory firm and its president for allegedly steering winning trades to favored clients and lying about how certain money was being spent. The SEC alleges that the investment adviser engaged in a cherry-picking scheme that awarded more profitable trades to hedge funds in which he and his family had invested, while providing less profitable trades to other clients. The SEC further alleges that the adviser and his firm misused rebates from a brokerage firm on commissions paid by clients for trades executed in the investment adviser's client accounts.

See: SEC Order; SEC Press Release.