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SEC charges Florida representative with cherry-picking scheme

On Behalf of | Sep 22, 2022 | Financial Advisor Misconduct

The Securities and Exchange Commission announced that a Florida investment advisor representative has been charged with a multi-year cherry-picking scheme, Wealth Management reports. The SEC said cherry-picking is a fraudulent practice in which advisors preferentially allocate preferable trades to their personal accounts at the expense of their client accounts.

The Florida case involves Scott Adam Brander of Delray Beach. Brander, his former employer Buckman Advisory Group, and his former supervisor Henry J. Buckman, Jr. each agreed to settle charges related to the scheme.

The SEC alleged in its complaint that from 2012 to 2017, Brander disproportionately allocated profitable trades to his own account and unprofitable trades to certain client accounts, earning himself over $800,000. Brander also often traded highly leveraged securities and disproportionately allocated unprofitable trades in those securities to his clients without analyzing whether the trades were suitable for the clients or discussing the risks with them, the commission said. Though the affected clients said they preferred investments with a moderate or conservative risk, the SEC said Brander allocated trades with highly-leveraged ETFs.

Brander was charged with violating antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. Brander did not admit or deny the allegations but agreed to pay disgorgement of $812,876, prejudgment interest of $169, 089.83, and a civil penalty of $200,000.

Henry Buckman Jr. and Buckman Advisory Group were charged with failing to implement policies and procedures reasonably designed to prevent violations of the Advisers Act and with failures in supervising Brander. Under the settlement, they did not admit or deny the SEC’s findings, but the firm agreed to a censure and a penalty of $400,000 and said it would adopt the recommendations of an independent compliance consultant. Buckman agreed to a penalty of $75,000 and a twelve-month limitation on acting in a supervisory capacity.

At Lewitas Hyman, we represent clients nationwide who are the victims of unauthorized trading, breaches of fiduciary duty and other forms of financial advisor misconduct and securities fraud. Our team of lawyers brings a diverse range of knowledge and experiences to our clients’ cases. If your financial adviser made trades without your consent, you may be able to pursue a lawsuit to recoup your losses. We’ll help you understand your rights and options. Contact us at (888) 655-6002 or email our team to learn more.