A former investment advisor in Connecticut has been sentenced to prison for “cherry picking” good investment deals for himself and leaving clients with losing ones, the SEC announced Wednesday.
Noah L. Myers of Lyme, Conn., the former owner of MiddleCove Capital LLC, was sentenced to 40 months in prison and three years of supervised parole after pleading guilty to one count of securities fraud in U.S. District Court in Bridgeport, Conn., in October.
From October 2008 until February 2011, Myers engaged in fraudulent trade allocations, according to the SEC. Myers executed his cherry-picking scheme by purchasing securities in the morning and then, at the end of the day or the next day, allocating trades that had appreciated in value to his personal and business accounts and allocating trades that had depreciated in value to the accounts of his clients, the SEC says.
Myers carried out his cherry-picking scheme with several securities, but was most active with an inverse and leveraged exchange-traded fund, the SEC says. He finally stopped doing it in February 2011, when one of his employees threatened to contact the SEC. At one time, MiddleCove Capital had $129 million in assets under management.