Broker fined, barred by SEC for cherry-picking
By Ryan Neal
Investment News
SEC issues cease-and-desist order to brokerage, trader Agency says Roger Denha unfairly allocated investment profits to personal, family accounts SEC alleges broker obtained $412,230 in realized and unrealized gains. The Securities and Exchange Commission is barring and fining Roger Denha, an investment adviser with Southfield-based BKS Advisors LLC, for allegedly engaging in “cherry-picking.” According to an SEC cease-and-desist order, Denha bought securities in an omnibus account and waited to allocate them until after they increased or decreased in price. Denha then disproportionately allocated profitable trades to his personal and family accounts, while allocating unprofitable trades to his advisory clients. He conducted this scheme from January 2012 to November 2017 to obtain $412,230 of realized and unrealized gains, the SEC filing alleges.
By knowingly allocating trades to favored accounts at the expense of others, the SEC said Denha violated a rule prohibiting investment advisers from employing any device, scheme or artifice to defraud clients. In addition to barring Denha, the SEC ordered a disgorgement of the gains plus $35,388 of interest. He was also fined $169,000. Denha, 61 of Beverly Hills, managed 197 clients and $202 million in assets. He has no other disciplinary history. The SEC said that BKS failed reasonably to supervise Denha and ordered the firm to pay a $75,000 civil penalty under a settlement agreement. BKS did not immediately respond to requests for comment Monday.
The Securities Attorneys at Peter C. Rageas are experienced in all type of securities litigation, investment fraud, stock broker negligence and more. If you have questions about investment fraud, financial schemes, broker misconduct, or about your broker’s management of your account, please contact our Securities Law Firm at: 313-334-7767 for a Free case evaluation.