Strong Investment Management, former Orange County investment adviser firm was previously charged by the SEC for securities fraud for their involvement in the scheme.
The Sonn Law Group is investigating claims that Strong Investment Management engaged in securities fraud. Under FINRA Rules, brokerage firms are liable for their brokers’ misconduct or negligence and investors may be able to their investment through FINRA arbitration. Contact Sonn Law Group today or call us at 866–827–3202 for a free consultation.
Following allegations by the SEC that Strong Investment Management (Strong) and Joseph B. Bronson (CRD#: 4603480)committed securities fraud stemming from their involvement in a “cherry-picking” scheme, the SEC filed an administrative proceeding against Bronson barring him from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or national recognized statistical rating organization.
The SEC’s complaint, filed on February 20, 2018, alleged that for more than four years, Bronson traded securities in Strong’s omnibus account but delayed allocating the securities to specific client accounts until he observed the performance of the securities over the course of the day.
Bronson purportedly received substantial profits at his clients’ expense by “cherry picking” the trades, disproportionately allocating profitable trades to himself and unprofitable trades to Strong’s clients. The SEC also alleged that Strong and Bronson misrepresented their practices in the firm’s forms.
Cherry-picking occurs when an investment adviser purchases securities, waits to see if the stock prices go up or down, then keeps the best trades for himself or the accounts that are favored, and gives the unfavorable trades to other clients.
The SEC ordered Strong and Bronson both to pay $960,656 in disgorgement and $100,501 in prejudgment interest. Bronson received an additional penalty of $184, 767.
John Engebretson, Bronson’s brother and former chief compliance officer of Strong, was also charged with failing to perform his compliance responsibilities and ignoring red flags raised during the course of the fraudulent scheme. Engebretson agreed to be enjoined, pay a civil penalty of $15,000, and to be barred from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.
Jeffrey R. Sonn is an experienced investor losses attorney. If you suffered losses because a financial professional recommended that you invest in unsuitable investments, Mr. Sonn will protect your rights and interests. Please do not hesitate to contact the Sonn Law Group today for a free review of your claim.