SEC charges Strong Investment Management and owner with 'cherry-picking' trades

Says Yorba Linda, Calif.-based RIA allocated profitable trades to owner, losers to clients.
FEB 22, 2018

The Securities and Exchange Commission has filed a complaint in federal court in California against Yorba Linda, Calif.-based Strong Investment Management and its president and sole owner, Joseph B. Bronson, for operating a scheme that defrauded Strong's clients. The complaint alleges that for more than four years, Mr. Bronson traded securities in Strong's omnibus account but delayed allocating the securities to specific client accounts until he had observed the securities' performance over the course of the day. Mr. Bronson reaped "substantial profits at his clients' expense by cherry-picking" the trades, and allocating the profitable ones to himself and the unprofitable trades to clients, the SEC charged. In a release, the SEC said the complaint also alleges that John B. Engebretson, Mr. Bronson's brother and the firm's former chief compliance office, ignored many warning signs raised during the course of the fraudulent scheme. In addition, the SEC alleges that the brothers misrepresented their trading and allocation practices in the firm's Forms ADV. The SEC said this is the third action arising out of an enforcement initiative to combat cherry-picking led by its Los Angeles regional office.

Latest News

The power of cultivating personal connections
The power of cultivating personal connections

Relationships are key to our business but advisors are often slow to engage in specific activities designed to foster them.

A variety of succession options
A variety of succession options

Whichever path you go down, act now while you're still in control.

'I’ll never recommend bitcoin,' advisor insists
'I’ll never recommend bitcoin,' advisor insists

Pro-bitcoin professionals, however, say the cryptocurrency has ushered in change.

LPL raises target for advisors’ bonuses for first time in a decade
LPL raises target for advisors’ bonuses for first time in a decade

“LPL has evolved significantly over the last decade and still wants to scale up,” says one industry executive.

What do older Americans have to say about long-term care?
What do older Americans have to say about long-term care?

Survey findings from the Nationwide Retirement Institute offers pearls of planning wisdom from 60- to 65-year-olds, as well as insights into concerns.

SPONSORED The future of prospecting: Say goodbye to cold calls and hello to smart connections

Streamline your outreach with Aidentified's AI-driven solutions

SPONSORED A bumpy start to autumn but more positives ahead

This season’s market volatility: Positioning for rate relief, income growth and the AI rebound