The Securities and Exchange Commission today announced settled fraud charges against GlennCap LLC, a Connecticut-based investment advisory firm, and its owner, Jonathan Vincent Glenn, for allocating profitable securities trades to favored accounts, including GlennCap’s own accounts and client accounts that paid GlennCap a higher percentage of positive returns in fees, while allocating a disproportionate amount of unprofitable trades to disfavored clients, a practice known as cherry-picking.
According to the SEC’s order, between at least January 2020 and March 2022, Glenn, who was also an investment adviser representative of GlennCap, engaged in block trading, which allowed him to pool funds from multiple clients’ accounts into trades, and then, after seeing whether a position increased or decreased in value, he allocated the more profitable trades to accounts that he favored. The probability that the favored accounts received the more profitable trades by chance was statistically nearly zero. The SEC’s order finds that Glenn and GlennCap received at least $2.7 million in profits from the cherry-picking scheme. Further, the SEC order found that Glenn made false and misleading statements regarding GlennCap’s trading practices in documents it provided to clients and prospective clients.
‘Enforcement 40’ for 2020
Join Us On LinkedIn
Join the Securities Litigation and Enforcement Group on LinkedIn