SEC v. SCOTT ADAM BRANDER, No. 2:22-cv-05506, District of New Jersey (Sept. 13, 2022) — Complaint

Joseph G. Sansone
Chief, Market Abuse Unit
Simona K. Suh
Rachael Clarke
James A. Scoggins II
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street, Suite 20-100
New York, NY 10004-2616
(212) 336-0103 (Suh)
[email protected]

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

SECURITIES AND EXCHANGE
COMMISSION,

                                             Plaintiff,

                        -against-

SCOTT ADAM BRANDER,

                                             Defendant.

COMPLAINT

22 Civ. 5506

JURY TRIAL DEMANDED

Plaintiff Securities and Exchange Commission (“Commission”), 100 Pearl Street, Suite 20-
100, New York, New York 10004, for its Complaint against Defendant Scott Adam Brander
(“Brander”), whose last known address is Delray Beach, Florida, alleges as follows:
SUMMARY
1. From approximately January 2012 until June 2017 (the “Relevant Period”), Brander,
an investment adviser representative of Buckman Advisory Group, LLC (“BAG”), engaged in a
fraudulent “cherry-picking” scheme, disproportionately allocating profitable trades to himself and
unprofitable trades to the accounts of certain of his clients (the “Disfavored Clients”), to enrich
himself at the expense of his clients.  Brander received ill-gotten gains of approximately $812,000 as
a result of his fraudulent scheme.

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2. In his cherry-picking scheme, Brander often traded shares of highly-leveraged
exchange traded funds (“ETFs”), which often experienced large price moves over the course of the
trading day.  Even though prospectuses for these ETFs contained warnings about the risks of
holding these investments, and even though all the Disfavored Clients stated in their account
opening documents that they were seeking more conservative investments, Brander failed to
perform any analysis to determine whether these ETFs were suitable for the Disfavored Clients’
stated investment objectives and risk tolerance.
VIOLATIONS
3. By virtue of the foregoing conduct and as alleged further herein, Defendant Brander
violated Section 17(a)(1) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)]; Section
10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)], and Rules 10b-
5(a) and (c) thereunder [17 C.F.R. §§ 240.10b-5(a) and (c)]; and Sections 206(1) and 206(2) of the
Investment Advisers Act of 1940 (“Advisers Act”) [15 U.S.C. §§ 80b-6(1) and (2)].
4. Unless Defendant is restrained and enjoined, he will engage in the acts, practices,
transactions, and courses of business set forth in this Complaint or in acts, practices, transactions,
and courses of business of similar type and object.
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
5. The Commission brings this action pursuant to the authority conferred upon it by
Securities Act Sections 20(b) and 20(d) [15 U.S.C. §§ 77t(b) and 77t(d)], Exchange Act Section 21(d)
[15 U.S.C. § 78u(d)], and Advisers Act Sections 209(d) and 209(e) [15 U.S.C. §§ 80b-9(d) and 80b-
9(e)].
6. The Commission seeks a final judgment: (a) permanently enjoining Defendant from
violating the federal securities laws and rules this Complaint alleges he has violated; (b) ordering
Defendant to disgorge all ill-gotten gains he received as a result of the violations alleged here and to

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pay prejudgment interest thereon, pursuant to Exchange Act Sections 21(d)(5) and 21(d)(7) [15
U.S.C. §§ 78u(d)(5) and 78u(d)(7)]; (c) ordering Defendant to pay civil money penalties pursuant to
Securities Act Section 20(d) [15 U.S.C. § 77t(d)], Exchange Act Section 21(d)(3) [15 U.S.C.
§ 78u(d)(3)], and Advisers Act Section 209(e) [15 U.S.C. § 80b-9(e)]; and (d) ordering any other and
further relief the Court may deem just and proper.
JURISDICTION AND VENUE
7. This Court has jurisdiction over this action pursuant to Securities Act Section 22(a)
[15 U.S.C. § 77v(a)], Exchange Act Section 27 [15 U.S.C. § 78aa], and Advisers Act Section 214 [15
U.S.C. § 80b-14].
8. Defendant, directly and indirectly, has made use of the means or instrumentalities of
interstate commerce or of the mails in connection with the transactions, acts, practices, and courses
of business alleged herein.
9. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)],
Exchange Act Section 27 [15 U.S.C. § 78aa], and Advisers Act Section 214 [15 U.S.C. § 80b-14].
Defendant transacted business in the District of  New Jersey, and certain of  the acts, practices,
transactions, and courses of  business alleged in this Complaint occurred within this District,
including transactions that Brander caused to be executed by his employer BAG, an investment
adviser with its principal place of  business in New Jersey, and that adviser’s affiliated broker-dealer,
Buckman, Buckman, & Reid, LLC (“BBR”), which is also a New Jersey-based business.  More
specifically, Brander directed that these firms execute the securities trades and make the related trade
allocations in the course of  his fraudulent scheme.

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DEFENDANT
1

10. Brander, age 54, was an investment adviser representative with BAG from 2007
until 2021.  He was also a registered representative with BAG’s affiliated broker-dealer BBR from
2003 to 2021.
OTHER RELEVANT ENTITIES
11. BAG is a New Jersey limited liability corporation with its principal place of business
in Little Silver, New Jersey.  BAG has been registered with the Commission as an investment adviser
since 2004.
12. BBR is a New Jersey limited liability corporation with its principal place of business
in Little Silver, New Jersey.  BBR is a broker-dealer registered with the Commission and an affiliate
of BAG.
FACTS
I.         BACKGROUND
13. “Cherry-picking” occurs when an investment adviser disproportionately allocates to
favored accounts securities that have performed well, and/or disproportionately allocates to disfavored
clients securities that have performed poorly.
14. Brander managed certain advisory client accounts at BAG, including accounts held
by the Disfavored Clients, on a discretionary basis – that is, he had authorization to make trading
decisions on behalf of those clients.
15. During the Relevant Period, Brander also maintained an account in his own name
and an account jointly held with his wife at BAG (together, the “Brander Accounts”).

1
  Brander entered into a series of agreements beginning on July 15, 2020, which tolled the
running of any statute of limitations applicable to any action brought by, or on behalf of, the
Commission.

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16. “Block” trades are used to aggregate purchases or sales of securities for multiple
accounts into a single trade.  Brander used an average-price account at BBR (the “Average Price
Account”) to place “block” trades on behalf of his clients’ accounts, as well as the Brander
Accounts, without specifying at the time of the purchase whether he was purchasing the security for
himself or for one or more of the clients.
17. Brander often placed block trades in shares of highly-leveraged exchange traded
funds (“ETFs”) in the course his cherry-picking scheme.  The price volatility of these leveraged
ETF’s presented higher risk to the holders of these securities.
18. Brander, as an investment adviser, was required to act in the best interest of his
clients when selecting securities for their accounts. To act in the best interest of his clients, Brander
was required to analyze whether his clients were willing to tolerate risks of the particular investments
in the context of the clients’ stated objectives and risk tolerances.
II. BRANDER’S CHERRY-PICKING SCHEME

19. From approximately January 2012 through June 2017, Brander used the Average
Price Account to purchase securities in block trades on behalf of his advisory clients and the
Brander Accounts.
20. Even though BAG’s written compliance manual until December 2015 required that
trade orders include instructions for how the shares in the block trade are to be allocated, Brander
frequently failed to provide allocation instructions for some trades until after the block trade was
executed.  Typically, Brander did not provide allocation instructions until several hours after the
trades were executed, and in some cases not until the following day.
21. For some trades, Brander often waited to provide allocation instructions until he
observed whether the trades were profitable in the hours following execution.  Brander then
disproportionately allocated profitable trades to the Brander Accounts, and he disproportionately

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allocated unprofitable trades to the Disfavored Clients.  Often, Brander immediately realized profits
from the profitable trades by selling shares soon after allocating them to the Brander Accounts.
22. Brander allocated 90% of trades with a positive performance between the time of
execution and the time of allocation (“winning trades”) to the Brander Accounts.  He only allocated
approximately 30% of trades with a negative performance between the time of execution and the
time of allocation (“losing trades”) to the Brander Accounts.  In contrast, Brander allocated
approximately 70% of the losing trades and only 10% of the winning trades to the Disfavored
Clients.
23. Because of Brander’s cherry-picking scheme, his allocations to the Brander Accounts
were generally profitable in the short term, with first-day gains of 1.84%, while allocations to the
Disfavored Clients were generally unprofitable in the short term, with first-day losses of –3.24%.
The likelihood that Brander would have earned these returns for himself in the absence of cherry-
picking, with trade allocations determined by chance, is less than one in a million.
24. As a result of this cherry-picking scheme, Brander obtained ill-gotten gains of
approximately $812,876.
III. BRANDER PURCHASED SECURITIES FOR CLIENTS WITHOUT
CONDUCTING SUITABILITY ANALYSIS

25.  None of the Disfavored Clients had a high tolerance for risk; all of them indicated
in account opening documents that they favored investments with moderate or conservative risk.
Nor were any of the Disfavored Clients seeking speculative or aggressive growth in their portfolios.
Each identified their investment objectives as either preserving capital or moderate capital
appreciation.
26. Brander often used highly-leveraged ETFs in his cherry-picking scheme.  As a result
of their highly-leveraged nature, these ETFs often experienced large price moves over the course of
the trading day.

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27. The prospectuses for these ETFs contained warnings, often in bold typeface, stating
that these products were, for example, much riskier than most exchange-traded funds and only
suitable for knowledgeable investors who understood the risks associated with these products’ use
of leverage.
28. Nonetheless, Brander did not conduct any analysis to determine that these ETFs
were in the best interests of the Disfavored Clients. Indeed, Brander repeatedly allocated highly-
leveraged ETFs that had experienced first-day losses to the Disfavored Clients and in some
circumstances also held them in the Disfavored Clients’ accounts for as long as several days, without
discussing the attendant risks of these ETFs and their holding periods with the Disfavored Clients.
FIRST CLAIM FOR RELIEF
Violations of Securities Act Section 17(a)(1)

29. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 28.
30. Defendant, directly or indirectly, in the offer or sale of securities and by the use of
the means or instruments of transportation or communication in interstate commerce or the mails,
knowingly or recklessly has employed one or more devices, schemes or artifices to defraud.
31. By reason of the foregoing, Defendant, directly or indirectly, has violated and, unless
enjoined, will again violate Securities Act Section 17(a)(1) [15 U.S.C. § 77q(a)(1)].
SECOND CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rules 10b-5(a) and (c) Thereunder

32. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 28.
33. Defendant, directly or indirectly, in connection with the purchase or sale of securities
and by the use of means or instrumentalities of interstate commerce, or the mails, or the facilities of
a national securities exchange, knowingly or recklessly has (i) employed one or more devices,

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schemes, or artifices to defraud, and/or (ii) engaged in one or more acts, practices, or courses of
business which operated or would operate as a fraud or deceit upon other persons.
34. By reason of the foregoing, Defendant, directly or indirectly, has violated and, unless
enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rules 10b-5(a) and
(c) thereunder [17 C.F.R. §§ 240.10b-5(a) and (c)].
THIRD CLAIM FOR RELIEF
Violations of Advisers Act Sections 206(1) and (2)

35. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 28.
36. At all relevant times, Defendant was an investment adviser under Advisers Act
Section 202(11) [15 U.S.C. § 80b-2(11)].
37. Defendant by use of  the mails or any means or instrumentality of  interstate
commerce, directly or indirectly has: (i) knowingly or recklessly employed one or more devices,
schemes, or artifices to defraud any client or prospective client, and/or (ii) knowingly, recklessly, or
negligently engaged in one or more transactions, practices, and courses of  business which operated
or would operate as a fraud or deceit upon any client or prospective client.
38. By reason of  the foregoing, Defendant, directly or indirectly, has violated and, unless
enjoined, will again violate Advisers Act Sections 206(1) and (2) [15 U.S.C. §§ 80b-6(1) and 80b-6(2)].
PRAYER FOR RELIEF
 WHEREFORE, the Commission respectfully requests that the Court enter a Final
Judgment:
I.
Permanently enjoining Defendant and his agents, servants, employees and attorneys and all
persons in active concert or participation with any of them from violating, directly or indirectly,
Securities Act Section 17(a) [15 U.S.C. § 77q(a)], Exchange Act Section 10(b) [15 U.S.C. § 78j(b)]

9
and Rule 10b-5(b) thereunder [17 C.F.R. § 240.10b-5(b)], and Advisers Act Sections 206(1) and
206(2) [15 U.S.C. §§ 80b-6(1) and (2)];
II.
Ordering Defendant to disgorge all ill-gotten gains he received directly or indirectly, with
pre-judgment interest thereon, as a result of the alleged violations under Sections 21(d)(5) [15 U.S.C.
§ 78u(d)(5)] and 21(d)(7) [15 U.S.C. § 78u(d)(7)] of the Exchange Act;
IV.
Ordering Defendant to pay civil monetary penalties under Securities Act Section 20(d)
[15 U.S.C. § 77t(d)], Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)],
 and Advisers Act Section
209(e) [15 U.S.C. § 80b(9)(e)];
V.
Granting any other and further relief this Court may deem just and proper.

Dated:  New York, New York
September 12, 2022
s/Simona K. Suh
Simona K. Suh*
Joseph G. Sansone*
Rachael Clarke*
James A. Scoggins II*
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street, Suite 20-100
New York, NY 10004-2616
(212) 336-0103 (Suh)
[email protected]

* Not admitted in District of New Jersey

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LOCAL RULE 11.2 CERTIFICATION

Pursuant to Local Rule 11.2, I certify that the matter in controversy alleged against the
Defendant in the foregoing Complaint is not the subject of any other civil action pending in any
court, or of any pending arbitration or administrative proceeding.
s/Simona K. Suh
Simona K. Suh*
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street, Suite 20-100
New York, NY 10004-2616
(212) 336-0103 (Suh)
[email protected]

Of Counsel:
Joseph G. Sansone
Rachael Clarke
James A. Scoggins II

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DESIGNATION OF AGENT FOR SERVICE

 Pursuant to Local Civil Rule 101.1(f), the undersigned hereby designates the United States
Attorney’s Office for the District of New Jersey to receive service of all notices or papers in this
action at the following address:
David E. Dauenheimer
United States Attorney’s Office
District of New Jersey
970 Broad Street, Suite 700
Newark, NJ 07102

s/Simona K. Suh
Simona K. Suh*
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street, Suite 20-100
New York, NY 10004-2616
(212) 336-0103 (Suh)
[email protected]

Of Counsel:
Joseph G. Sansone
Rachael Clarke
James A. Scoggins II

Joseph G. Sansone 
Chief, Market Abuse Unit 
Simona K. Suh 
Rachael Clarke 
James A. Scoggins II 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street, Suite 20-100 
New York, NY 10004-2616 
(212) 336-0103 (Suh) 
[email protected] 
 
UNITED STATES DISTRICT COURT 
DISTRICT OF NEW JERSEY 

 
SECURITIES AND EXCHANGE 
COMMISSION, 
 
                                             Plaintiff, 
 
                        -against- 
 
SCOTT ADAM BRANDER, 
  
                                             Defendant. 
 
 

 
 
COMPLAINT 

   
22 Civ. 5506  

 
   

JURY TRIAL DEMANDED 
  

           
          

 
Plaintiff Securities and Exchange Commission (“Commission”), 100 Pearl Street, Suite 20-

100, New York, New York 10004, for its Complaint against Defendant Scott Adam Brander 

(“Brander”), whose last known address is Delray Beach, Florida, alleges as follows: 

SUMMARY 

1. From approximately January 2012 until June 2017 (the “Relevant Period”), Brander, 

an investment adviser representative of Buckman Advisory Group, LLC (“BAG”), engaged in a 

fraudulent “cherry-picking” scheme, disproportionately allocating profitable trades to himself and 

unprofitable trades to the accounts of certain of his clients (the “Disfavored Clients”), to enrich 

himself at the expense of his clients.  Brander received ill-gotten gains of approximately $812,000 as 

a result of his fraudulent scheme. 

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2. In his cherry-picking scheme, Brander often traded shares of highly-leveraged 

exchange traded funds (“ETFs”), which often experienced large price moves over the course of the 

trading day.  Even though prospectuses for these ETFs contained warnings about the risks of 

holding these investments, and even though all the Disfavored Clients stated in their account 

opening documents that they were seeking more conservative investments, Brander failed to 

perform any analysis to determine whether these ETFs were suitable for the Disfavored Clients’ 

stated investment objectives and risk tolerance.  

VIOLATIONS 

3. By virtue of the foregoing conduct and as alleged further herein, Defendant Brander 

violated Section 17(a)(1) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)]; Section 

10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)], and Rules 10b-

5(a) and (c) thereunder [17 C.F.R. §§ 240.10b-5(a) and (c)]; and Sections 206(1) and 206(2) of the 

Investment Advisers Act of 1940 (“Advisers Act”) [15 U.S.C. §§ 80b-6(1) and (2)]. 

4. Unless Defendant is restrained and enjoined, he will engage in the acts, practices, 

transactions, and courses of business set forth in this Complaint or in acts, practices, transactions, 

and courses of business of similar type and object.   

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

5. The Commission brings this action pursuant to the authority conferred upon it by 

Securities Act Sections 20(b) and 20(d) [15 U.S.C. §§ 77t(b) and 77t(d)], Exchange Act Section 21(d) 

[15 U.S.C. § 78u(d)], and Advisers Act Sections 209(d) and 209(e) [15 U.S.C. §§ 80b-9(d) and 80b-

9(e)].  

6. The Commission seeks a final judgment: (a) permanently enjoining Defendant from 

violating the federal securities laws and rules this Complaint alleges he has violated; (b) ordering 

Defendant to disgorge all ill-gotten gains he received as a result of the violations alleged here and to 

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pay prejudgment interest thereon, pursuant to Exchange Act Sections 21(d)(5) and 21(d)(7) [15 

U.S.C. §§ 78u(d)(5) and 78u(d)(7)]; (c) ordering Defendant to pay civil money penalties pursuant to 

Securities Act Section 20(d) [15 U.S.C. § 77t(d)], Exchange Act Section 21(d)(3) [15 U.S.C. 

§ 78u(d)(3)], and Advisers Act Section 209(e) [15 U.S.C. § 80b-9(e)]; and (d) ordering any other and 

further relief the Court may deem just and proper.  

JURISDICTION AND VENUE 

7. This Court has jurisdiction over this action pursuant to Securities Act Section 22(a) 

[15 U.S.C. § 77v(a)], Exchange Act Section 27 [15 U.S.C. § 78aa], and Advisers Act Section 214 [15 

U.S.C. § 80b-14].  

8. Defendant, directly and indirectly, has made use of the means or instrumentalities of 

interstate commerce or of the mails in connection with the transactions, acts, practices, and courses 

of business alleged herein. 

9. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)], 

Exchange Act Section 27 [15 U.S.C. § 78aa], and Advisers Act Section 214 [15 U.S.C. § 80b-14]. 

Defendant transacted business in the District of  New Jersey, and certain of  the acts, practices, 

transactions, and courses of  business alleged in this Complaint occurred within this District, 

including transactions that Brander caused to be executed by his employer BAG, an investment 

adviser with its principal place of  business in New Jersey, and that adviser’s affiliated broker-dealer, 

Buckman, Buckman, & Reid, LLC (“BBR”), which is also a New Jersey-based business.  More 

specifically, Brander directed that these firms execute the securities trades and make the related trade 

allocations in the course of  his fraudulent scheme. 

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DEFENDANT1 

10. Brander, age 54, was an investment adviser representative with BAG from 2007 

until 2021.  He was also a registered representative with BAG’s affiliated broker-dealer BBR from 

2003 to 2021. 

OTHER RELEVANT ENTITIES 

11. BAG is a New Jersey limited liability corporation with its principal place of business 

in Little Silver, New Jersey.  BAG has been registered with the Commission as an investment adviser 

since 2004. 

12. BBR is a New Jersey limited liability corporation with its principal place of business 

in Little Silver, New Jersey.  BBR is a broker-dealer registered with the Commission and an affiliate 

of BAG. 

FACTS 

I. BACKGROUND  

13. “Cherry-picking” occurs when an investment adviser disproportionately allocates to 

favored accounts securities that have performed well, and/or disproportionately allocates to disfavored 

clients securities that have performed poorly. 

14. Brander managed certain advisory client accounts at BAG, including accounts held 

by the Disfavored Clients, on a discretionary basis – that is, he had authorization to make trading 

decisions on behalf of those clients.   

15. During the Relevant Period, Brander also maintained an account in his own name 

and an account jointly held with his wife at BAG (together, the “Brander Accounts”). 

                                                 
1  Brander entered into a series of agreements beginning on July 15, 2020, which tolled the 
running of any statute of limitations applicable to any action brought by, or on behalf of, the 
Commission. 
 

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16. “Block” trades are used to aggregate purchases or sales of securities for multiple 

accounts into a single trade.  Brander used an average-price account at BBR (the “Average Price 

Account”) to place “block” trades on behalf of his clients’ accounts, as well as the Brander 

Accounts, without specifying at the time of the purchase whether he was purchasing the security for 

himself or for one or more of the clients.   

17. Brander often placed block trades in shares of highly-leveraged exchange traded 

funds (“ETFs”) in the course his cherry-picking scheme.  The price volatility of these leveraged 

ETF’s presented higher risk to the holders of these securities. 

18. Brander, as an investment adviser, was required to act in the best interest of his 

clients when selecting securities for their accounts. To act in the best interest of his clients, Brander 

was required to analyze whether his clients were willing to tolerate risks of the particular investments 

in the context of the clients’ stated objectives and risk tolerances.   

II. BRANDER’S CHERRY-PICKING SCHEME 
 

19. From approximately January 2012 through June 2017, Brander used the Average 

Price Account to purchase securities in block trades on behalf of his advisory clients and the 

Brander Accounts. 

20. Even though BAG’s written compliance manual until December 2015 required that 

trade orders include instructions for how the shares in the block trade are to be allocated, Brander 

frequently failed to provide allocation instructions for some trades until after the block trade was 

executed.  Typically, Brander did not provide allocation instructions until several hours after the 

trades were executed, and in some cases not until the following day. 

21. For some trades, Brander often waited to provide allocation instructions until he 

observed whether the trades were profitable in the hours following execution.  Brander then 

disproportionately allocated profitable trades to the Brander Accounts, and he disproportionately 

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allocated unprofitable trades to the Disfavored Clients.  Often, Brander immediately realized profits 

from the profitable trades by selling shares soon after allocating them to the Brander Accounts. 

22. Brander allocated 90% of trades with a positive performance between the time of 

execution and the time of allocation (“winning trades”) to the Brander Accounts.  He only allocated 

approximately 30% of trades with a negative performance between the time of execution and the 

time of allocation (“losing trades”) to the Brander Accounts.  In contrast, Brander allocated 

approximately 70% of the losing trades and only 10% of the winning trades to the Disfavored 

Clients. 

23. Because of Brander’s cherry-picking scheme, his allocations to the Brander Accounts 

were generally profitable in the short term, with first-day gains of 1.84%, while allocations to the 

Disfavored Clients were generally unprofitable in the short term, with first-day losses of –3.24%.  

The likelihood that Brander would have earned these returns for himself in the absence of cherry-

picking, with trade allocations determined by chance, is less than one in a million. 

24. As a result of this cherry-picking scheme, Brander obtained ill-gotten gains of 

approximately $812,876. 

III. BRANDER PURCHASED SECURITIES FOR CLIENTS WITHOUT 
CONDUCTING SUITABILITY ANALYSIS 

 
25.  None of the Disfavored Clients had a high tolerance for risk; all of them indicated 

in account opening documents that they favored investments with moderate or conservative risk.  

Nor were any of the Disfavored Clients seeking speculative or aggressive growth in their portfolios.  

Each identified their investment objectives as either preserving capital or moderate capital 

appreciation. 

26. Brander often used highly-leveraged ETFs in his cherry-picking scheme.  As a result 

of their highly-leveraged nature, these ETFs often experienced large price moves over the course of 

the trading day.   

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27. The prospectuses for these ETFs contained warnings, often in bold typeface, stating 

that these products were, for example, much riskier than most exchange-traded funds and only 

suitable for knowledgeable investors who understood the risks associated with these products’ use 

of leverage.   

28. Nonetheless, Brander did not conduct any analysis to determine that these ETFs 

were in the best interests of the Disfavored Clients. Indeed, Brander repeatedly allocated highly-

leveraged ETFs that had experienced first-day losses to the Disfavored Clients and in some 

circumstances also held them in the Disfavored Clients’ accounts for as long as several days, without 

discussing the attendant risks of these ETFs and their holding periods with the Disfavored Clients.  

FIRST CLAIM FOR RELIEF 
Violations of Securities Act Section 17(a)(1) 

 
29. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 28. 

30. Defendant, directly or indirectly, in the offer or sale of securities and by the use of 

the means or instruments of transportation or communication in interstate commerce or the mails, 

knowingly or recklessly has employed one or more devices, schemes or artifices to defraud. 

31. By reason of the foregoing, Defendant, directly or indirectly, has violated and, unless 

enjoined, will again violate Securities Act Section 17(a)(1) [15 U.S.C. § 77q(a)(1)]. 

SECOND CLAIM FOR RELIEF 
Violations of Exchange Act Section 10(b) and Rules 10b-5(a) and (c) Thereunder 

 
32. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 28. 

33. Defendant, directly or indirectly, in connection with the purchase or sale of securities 

and by the use of means or instrumentalities of interstate commerce, or the mails, or the facilities of 

a national securities exchange, knowingly or recklessly has (i) employed one or more devices, 

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schemes, or artifices to defraud, and/or (ii) engaged in one or more acts, practices, or courses of 

business which operated or would operate as a fraud or deceit upon other persons. 

34. By reason of the foregoing, Defendant, directly or indirectly, has violated and, unless 

enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rules 10b-5(a) and 

(c) thereunder [17 C.F.R. §§ 240.10b-5(a) and (c)]. 

THIRD CLAIM FOR RELIEF 
Violations of Advisers Act Sections 206(1) and (2) 

 
35. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 28.  

36. At all relevant times, Defendant was an investment adviser under Advisers Act 

Section 202(11) [15 U.S.C. § 80b-2(11)]. 

37. Defendant by use of  the mails or any means or instrumentality of  interstate 

commerce, directly or indirectly has: (i) knowingly or recklessly employed one or more devices, 

schemes, or artifices to defraud any client or prospective client, and/or (ii) knowingly, recklessly, or 

negligently engaged in one or more transactions, practices, and courses of  business which operated 

or would operate as a fraud or deceit upon any client or prospective client. 

38. By reason of  the foregoing, Defendant, directly or indirectly, has violated and, unless 

enjoined, will again violate Advisers Act Sections 206(1) and (2) [15 U.S.C. §§ 80b-6(1) and 80b-6(2)]. 

PRAYER FOR RELIEF 

 WHEREFORE, the Commission respectfully requests that the Court enter a Final 

Judgment: 

I. 

Permanently enjoining Defendant and his agents, servants, employees and attorneys and all 

persons in active concert or participation with any of them from violating, directly or indirectly, 

Securities Act Section 17(a) [15 U.S.C. § 77q(a)], Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] 

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and Rule 10b-5(b) thereunder [17 C.F.R. § 240.10b-5(b)], and Advisers Act Sections 206(1) and 

206(2) [15 U.S.C. §§ 80b-6(1) and (2)];  

II. 

Ordering Defendant to disgorge all ill-gotten gains he received directly or indirectly, with 

pre-judgment interest thereon, as a result of the alleged violations under Sections 21(d)(5) [15 U.S.C. 

§ 78u(d)(5)] and 21(d)(7) [15 U.S.C. § 78u(d)(7)] of the Exchange Act; 

IV. 

Ordering Defendant to pay civil monetary penalties under Securities Act Section 20(d) 

[15 U.S.C. § 77t(d)], Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)], and Advisers Act Section 

209(e) [15 U.S.C. § 80b(9)(e)];  

V. 

Granting any other and further relief this Court may deem just and proper. 

 
Dated: New York, New York 

September 12, 2022 

s/Simona K. Suh  
Simona K. Suh* 
Joseph G. Sansone* 
Rachael Clarke* 
James A. Scoggins II* 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street, Suite 20-100 
New York, NY 10004-2616 
(212) 336-0103 (Suh) 
[email protected] 
 
* Not admitted in District of New Jersey 

  

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LOCAL RULE 11.2 CERTIFICATION 
 

Pursuant to Local Rule 11.2, I certify that the matter in controversy alleged against the 

Defendant in the foregoing Complaint is not the subject of any other civil action pending in any 

court, or of any pending arbitration or administrative proceeding.   

s/Simona K. Suh  
Simona K. Suh* 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street, Suite 20-100 
New York, NY 10004-2616 
(212) 336-0103 (Suh) 
[email protected] 

 
 

Of Counsel: 
Joseph G. Sansone 
Rachael Clarke 
James A. Scoggins II 
 
  

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DESIGNATION OF AGENT FOR SERVICE 
 

 Pursuant to Local Civil Rule 101.1(f), the undersigned hereby designates the United States 

Attorney’s Office for the District of New Jersey to receive service of all notices or papers in this 

action at the following address: 

David E. Dauenheimer  
United States Attorney’s Office 
District of New Jersey 
970 Broad Street, Suite 700 
Newark, NJ 07102   

 
s/Simona K. Suh  
Simona K. Suh* 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
100 Pearl Street, Suite 20-100 
New York, NY 10004-2616 
(212) 336-0103 (Suh) 
[email protected] 

 
Of Counsel: 
Joseph G. Sansone 
Rachael Clarke 
James A. Scoggins II 

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