A California hybrid advisor will accept a censure and pay $100,000 to settle allegations of a cherry-picking scheme run by a now-barred representative.

La Jolla, Calif.-based Laurel Wealth Advisors and one of its former representatives, Joseph C. Buchanan, accepted cease-and-desist orders and monetary penalties as settlement for their roles in a cherry-picking scheme in a U.S. Securities and Exchange Commission administrative proceeding on Monday.

According to the SEC complaint, from at least March 2013 to June 2015 Buchanan and Laurel Wealth Advisors placed orders in an omnibus account to buy securities to allocate to client or personal accounts, but the allocation of securities was delayed until after the trades were executed—at times, the delay would extend until after the market closed or the subsequent day.

By the time Buchanan allocated the trades from his omnibus account, he could see whether share prices had increased or decreased to create greater unrealized profits. Buchanan allegedly allocated a disproportionate number of profitable trades to his personal account while allocating a disproportionate number of unprofitable trades to his clients.

By February 2013, Laurel Wealth Advisors’ brokerage provider allegedly contacted Buchanan about the late allocations and emphasized that he needed to complete the allocations on the trade date, but Buchanan continued to delay allocations—which led the brokerage provider to contact Laurel Wealth about his conduct. Yet according to the SEC, the cherry-picking continued.

In February 2015, the brokerage provider suspended Buchanan’s use of the omnibus account for one month. Buchanan allegedly resumed his behavior in March 2015 until Laurel Wealth suspended his access.

As a result of his cherry-picking, Buchanan allegedly received at least $56,227 in ill-gotten gains while allocating $60,821 in combined, same-day unrealized losses to his clients.

The SEC claims that Laurel Wealth Advisors failed to implement procedures that could have prevented the scheme. For example, a policy of pre-clearing and pre-approving the purchase and sale of most securities in its representatives’ personal accounts was not fully implemented until January 2015, well after Buchanan’s behavior had been uncovered, the SEC said.

The SEC also claimed that Laurel Wealth failed to supervise Buchanan despite being notified of his trading and allocation behaviors as early as April 2013.

According to the SEC, Buchanan resigned Laurel Wealth Advisors in December 2015.

According to Finra’s BrokerCheck website, Buchanan was previously terminated by Morgan Stanley Smith Barney for engaging in “outside activities” without the firm’s approval. Morgan Stanley would later bring Buchanan to arbitration regarding a breach of promissory notes. That arbitration led to a July 2013 decision against Buchanan awarding Morgan Stanley more than $180,000. Finra subsequently suspended Buchanan from December 2013 to November 2015 for failure to satisfactorily respond to an arbitration decision or request for information.

Laurel Wealth undertook several remedial procedures, uncluding hiring a new chief compliance officer, engaging outside compliance consultants and counsel, and raising restrictions on representatives’ personal trading. The firm also cooperated with the SEC in its investigation, according to BrokerCheck.

As a result, the SEC censured Laurel Wealth Advisors and ordered the firm to pay a $100,000 civil penalty.

The SEC barred Buchanan from associations with any broker-dealer, advisor, transfer agent or ratings association, and forbade him to act as an employee, officer, director or board member of any registered investment company. The SEC also issued a cease-and-desist order to prevent both Buchanan and Laurel Wealth Advisors from engaging in future cherry-picking schemes.

Buchanan told the SEC that he is unable to pay disgorgement, prejudgment interest or a civil penalty, thus the SEC waived all but $40,000 of his penalties and disgorgement, the SEC said.