SEC v. Eric McKenzie Cobb, No. LR-26201, Southern District of New York (Dec. 20, 2024) — Press Release
raw: Eric McKenzie Cobb
Eric McKenzie Cobb, No. 1:24-cv-09494-PKC (S.D.N.Y. Dec. 20, 2024)
summary
Former SeaCrest Wealth Management representative Eric Cobb was charged by the SEC for a cherry-picking scheme that favored his personal accounts over his clients' accounts.
paragraph
Eric Cobb is charged with violating antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. Between June 2019 and mid-April 2022, he allegedly manipulated trade allocations to favor his own and his wife's accounts. The SEC complaint also highlights his failure to align client investments with their specific risk profiles.
narrative
The SEC charged Eric McKenzie Cobb, a former representative of SeaCrest Wealth Management, Inc., with executing a fraudulent cherry-picking scheme. From June 2019 to mid-April 2022, Cobb allegedly used omnibus accounts to monitor price movements before disproportionately allocating profitable trades to his personal and wife’s accounts. Conversely, he assigned unprofitable trades to his other clients and placed them in highly volatile investments unsuitable for their risk profiles. The SEC filed the complaint in the U.S. District Court for the Southern District of New York. Cobb faces charges for violating the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. The litigation is being led by the SEC’s New York Regional Office.
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Statutes
Parties
Securities and Exchange CommissionEric McKenzie Cobb
Keywords
seccobbsecuritiessecurities exchangeeric mckenziemckenzie cobbexchange commissiontradesericexchangeallocated profitableaccounts unprofitableunprofitable tradesmckenziecommission
Exhibits & Attached Documents (1)
Extracted insights
Entities 2
- person eric cobb
- agency Securities and Exchange Commission
Triples 8
- Securities And Exchange Commission charged Eric Cobb of South Carolina with engaging in a fraudulent scheme where he allocated profitable securities trades to favored accounts and unprofitable trades to disfavored clients
- Eric Cobb allocated profitable trades to his personal and wife's accounts
- Eric Cobb allocated unprofitable trades to the accounts of his other clients
- Eric Cobb executed a scheme by buying securities in an omnibus account and waiting a day or longer to allocate trades to see if prices increased
- Eric Cobb placed clients in highly volatile and risky investments inconsistent with their investment profiles
- Securities And Exchange Commission filed a complaint in U.S. District Court for the Southern District of New York charging violations of Section 17(a)(1) and (3) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c), and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940
- Securities And Exchange Commission conducted an investigation by Bennett Ellenbogen, James Flynn, Richard Primoff, and Lindsay S. Moilanen of the New York Regional Office
- Securities And Exchange Commission will be led by Mr. Ellenbogen and Mr. Primoff and supervised by Alex Vasilescu
PDF (from attached: complaint)
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Extracted body text (2,153c)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26201 / December 20, 2024 Securities and Exchange Commission v. Eric McKenzie Cobb, No. 1:24-cv-09494-PKC (S.D.N.Y. filed Dec. 12, 2024) SEC Charges Former Representative of Advisory Firm SeaCrest with Cherry-Picking The Securities and Exchange Commission today announced it charged Eric Cobb of South Carolina with engaging in a fraudulent scheme where he allocated profitable securities trades to favored accounts and unprofitable trades to disfavored clients, a practice known as cherry-picking, while he was a representative of investment adviser SeaCrest Wealth Management, Inc. According to the SEC’s complaint against Cobb, from at least June 2019 to mid-April 2022, Cobb allegedly disproportionately allocated profitable trades to his personal and wife’s accounts, and unprofitable trades to the accounts of his other clients. Cobb allegedly executed the scheme by buying securities in an omnibus account and then often waiting a day or longer to allocate the trades, which allowed him to see whether the securities had increased in price. The SEC’s complaint also alleges that Cobb routinely placed clients in highly volatile and risky investments that were inconsistent with their investment profiles. The SEC’s complaint, filed in U.S. District Court for the Southern District of New York, charges with violating the antifraud provisions of Section 17(a)(1) and (3) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The SEC’s investigation was conducted by Bennett Ellenbogen, James Flynn, Richard Primoff, and Lindsay S. Moilanen of the New York Regional Office and was supervised by Sheldon L. Pollock. The SEC’s litigation will be led by Mr. Ellenbogen and Mr. Primoff and supervised by Alex Vasilescu. The SEC appreciates the assistance of SEC Division of Examinations staff, Arjuman Sultana, Michael Qualter, Emanuel Asmar, and Merryl Hoffman; and SEC Division of Economics and Risk Analysis staff, Kathryn Paige and Tyler Remick.
OCR text (2,153c · html-text · 99% conf)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26201 / December 20, 2024 Securities and Exchange Commission v. Eric McKenzie Cobb, No. 1:24-cv-09494-PKC (S.D.N.Y. filed Dec. 12, 2024) SEC Charges Former Representative of Advisory Firm SeaCrest with Cherry-Picking The Securities and Exchange Commission today announced it charged Eric Cobb of South Carolina with engaging in a fraudulent scheme where he allocated profitable securities trades to favored accounts and unprofitable trades to disfavored clients, a practice known as cherry-picking, while he was a representative of investment adviser SeaCrest Wealth Management, Inc. According to the SEC’s complaint against Cobb, from at least June 2019 to mid-April 2022, Cobb allegedly disproportionately allocated profitable trades to his personal and wife’s accounts, and unprofitable trades to the accounts of his other clients. Cobb allegedly executed the scheme by buying securities in an omnibus account and then often waiting a day or longer to allocate the trades, which allowed him to see whether the securities had increased in price. The SEC’s complaint also alleges that Cobb routinely placed clients in highly volatile and risky investments that were inconsistent with their investment profiles. The SEC’s complaint, filed in U.S. District Court for the Southern District of New York, charges with violating the antifraud provisions of Section 17(a)(1) and (3) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The SEC’s investigation was conducted by Bennett Ellenbogen, James Flynn, Richard Primoff, and Lindsay S. Moilanen of the New York Regional Office and was supervised by Sheldon L. Pollock. The SEC’s litigation will be led by Mr. Ellenbogen and Mr. Primoff and supervised by Alex Vasilescu. The SEC appreciates the assistance of SEC Division of Examinations staff, Arjuman Sultana, Michael Qualter, Emanuel Asmar, and Merryl Hoffman; and SEC Division of Economics and Risk Analysis staff, Kathryn Paige and Tyler Remick.